Trouble brewing for the world's self-appointed "policeman"

One would never know it watching CNN but serious trouble is brewing around the world for the self-appointed World's Policeman. Washington has not had it this difficult, at least in recent memory. Vice-President Biden's last minute decision to flee
from a public meeting with the chocolate king in Kiev; the ugly name calling against the Hungarian president; China's economy overtaking the US; growing anti-EU sentiments in eastern Europe; the theft of Moldova's pro-Russia vote; the ouster of Georgia's Western-backed Defense Minister; the increasingly desperate acts of Armenia's Western-led political opposition; the massive energy deal struck between Moscow and Beijing; and more recent major energy deal agreed to between Moscow and NATO member Ankara are symbolic
of serious American foreign policy failures around the world today. And renewed racial tensions flaring in the American heartland and yet another looming "government shutdown" are symbolic of the
country's many persistent and potentially catastrophic domestic ailments.

Make no mistake about it, trouble is brewing for the self-appointed World's Cop. From eastern Europe to the Caucasus, from the
Middle East to the Far East, chess pieces long positioned to benefit the
Western world are beginning to move in favor of the Eastern world.

It was not supposed to be this way.

They
found themselves alone on the very top of the world's food chain in
1991 when the Soviet Union suddenly imploded and ceased to exist as a
deterrence. Fate would hand the Western political establishment the
world on a
silver platter. With a massive geopolitical vacuum thus created before
them, "forces of freedom" began raiding Middle Eastern oil fields with
impunity, and they also began the
systematic invasion of former Soviet nations with
"forces of democracy". Without a capable opponent on the other side of
the
political divide to check their actions, they moved the chess
pieces around at will and with great disregard to human suffering, and despite
persistent complaints from places such as Tehran, Moscow and Beijing.

But
fate would also have it that their tenure at the top of the world would
not last very long. By 2007/2008 things began to go awry. Western
powers have since suffered a series of geopolitical setback on the world
stage. Now that they
have begun losing control over strategic regions of the world where
they have had an iron grip over, Washington is exhibiting clear signs of
ailments. The Western political order may be coming the Sick Man of the
world. With the following I have outlined some of its more apparent
symptoms.

The Sick Man of the world

Recent years have revealed to the world public that the Western financial system is essentially a virtual reality, a massive Ponzi scheme and that the impressive castle Western powers have build for themselves is essentially a house of cards.
More-and-more Americans are beginning to recognize that the US Dollar's
"reserve currency" status is a double edged sword that will harm the US in the long term. We have also come to learn that the so-called "growth based" economic model of the
Anglo-American-Jewish world is doomed to fail because it is unnatural,
irrational and unsustainable -

The
virtual might of the US Dollar will come to an end, the economy will
begin to shrink and the fancy house-of-cards will come crashing down one
day. Without its artificial luster, Western
civilization -
the low quality Anglo-American-Afro-Jewish pop culture that has
created an ignorant, selfish, materialistic, violent, vulgar and Godless
society where apathy rules and perversions are rampant - will surely
fall apart. But we are not there just yet. But give it time and it will
come to
pass. A deeply flawed economic/financial system and a deeply corrupted society
are not Washington's only long-term problems. Washington is suffering a
series of major geopolitical setbacks in recent years.

Western powers have already been evicted from former Soviet territory in Central Asia and the Caucasus. There
are also now a number of nations within the Western political orbit - Bulgaria, Serbia, Macedonia, Greece, Moldova, Hungry and Turkey in particular - that if given the chance
may actually break from the West and seek better ties with the East. In their haste to expand NATO
eastward, Western powers incorporated into their structures a
number of such nations that will prove very problematic for them in due time. In
Ukraine, the Western experiment to weaken Russian influence in Europe
is in tatters
as Russia takes back Ukrainian territory bit-by-bit, and the West is
left with paying for Ukraine's mounting bills which is growing
day-by-day. Russia's resurgent military seems to be everywhere: Strategic bombers patrols and naval warships have been appearing throughout Europe
and the Far East, and there is talk that Russia will for the first time
in its history begin strategic bomber patrols right in Washington's backyard. In the south Caucasus, Georgia seems well on its way to freeing itself
of the Western infestation it was afflicted with some ten years ago. In
the Middle East, Moscow has managed to keep Assad's government in power
and even when the inevitable happens and Syria is broken up, Moscow
will continue to maintain it's military presence in Tartus within a
newly formed Alewite state. In Iran, Moscow and Tehran are involved in a
number of high profile projects. In Asia, despite Washington's efforts to derail Russo-Sino relations, the strategic partnership between Moscow and Beijing forges ahead as never before. Perhaps more importantly, discussions about breaking the US Dollar's hold
over humanity is gaining traction around the world. Moscow has in
recent years managed to roll back most Western advances in Eurasia. More
importantly, it has begum taking the initiative in various theaters of
operation.Things are getting very difficult for the World's Policeman.

Although
the American news press did its best to paint the US President's recent
visit
to China as a victory for American diplomacy and a sign of US leadership
in the world, the reality of the matter was a bit different. The
agreement on global warming signed between Washington and Beijing was
meaningless fluff. In other words, all show, no substance. As Moscow and
Beijing are getting closer militarily, politically, economically and
financially, Washington and Beijing are drifting further-and-further
apart. If you
page through the large number of nonsense appearing in the
US news press, you may be able to find a handful of articles that are
closer to the not-so-comfortable reality that
currently exists between the US and China. The following two articles
can be characterized as such -

The
international gathering in Beijing was not the only noteworthy global
event in recent weeks. Coming on the heels of the China summit,
President
Putin made a grand arrival at the G20 meeting in Australia - with a naval armada!
More poignant than the Russian president's stylish naval escort was the warning the Russian president gave Western leaders during his appearance there
that Moscow is prepared to deal with anything
Western powers decide to do against Russia. Besides
preparing to whether the economic/financial war being waged against it
by Western powers, Moscow is also preparing for the worst case scenario, just in case things escalate out of control.

Things are getting very difficult for the World's Policeman.Western aggression in places such as Libya, Syria and Ukraine may
ostensibly suggest Western prowess at first glance but it's actually a good indicator that the Western political order is desperate and in a panic. They are essentially out
on a killing spree to ensure their survival in this rapidly changing world. With
the resurrection of the Russian Bear and with the rise of China - and
with
the resilience of the Shiite regime in Iran - the Western political
order
is suddenly faced with its inability to stop the political tides around
the world from changing. This is why Washington is growing increasingly
desperate. This is why Western powers are - directly and indirectly - engaged in military actions around the world.And their desperate effort to maintain global supremacy at a time of
historic changes has been the main motivating factor
behind their aggression towards Russia. I talk more about this in a previous commentary -

Within the American homeland, the mainstream news press is rife these days
with complaints about Washington's impotency in foreign affairs and
establishment authors are publicly lamenting America's retreat
on the global stage.
Although many prominent voices across the US are blaming the House
Negro serving in the White House for the empire's woes, the problems the
American empire faces today are much larger and much deeper
than any one president. In fact, the problems the empire faces today are global in scope and fundamental in nature.

Forecasting
an inevitable weakening of Western power, Kremlin officials are
carefully and meticulously positioning Russian assets in strategic areas of the world. Kremlin's intent is to see the
Russian Federation pick up where Washington leaves off. Yes, Moscow is
seeking to become a global power once more. We see this Kremlin agenda
in the creation of the Eurasian Union. We see this Kremlin
agenda in the creation of CSTO to rival NATO. We see this Kremlin agenda
in the forging a strategic alliance with China, the world's soon to be largest economy in the world. We see this Kremlin agenda in the rekindling of Russian ties in South America. We see this Kremlin agenda in its stockpiling of gold.
We see this Kremlin agenda in the historic rearmament and modernization
of the Russian armed forces. We see this Kremlin agenda in the increasing numbers of strategic bomber and nuclear submarine patrols around the world. We
see this Kremlin agenda in Moscow's active participation in non-Western
multinational bodies such as SCO and BRICS. We see this Kremlin agenda in making its voice heard around the world. Finally, and
perhaps more poignantly, we see this Kremlin agenda in the effort against the most powerful weapon in the Western
arsenal - US Dollar. What
only a few years ago was unthinkable, how to dethrone the US Dollar and
free the world from Anglo-American-Jewish control has become a favorite
problem solving game for senior officials in Moscow and Beijing -

I
am not under any illusions. I do understand that breaking the iron grip
the US Dollar has over the world will be a very complicated, drawn-out
and bloody affair. But it has to be done for the sake of humanity. I personally feel it will happen sooner or later. Emerging powers
such as Russia, China, India, Iran and Brazil are preparing
for the inevitable dethronement of the Western world's most powerful
weapon-of-mass-destruction. But we still have a very long way to go. In the
meanwhile, the reader would do well to stop forming opinions on money
and politics based on what Western "indicators" such as the Dow Jones,
Corruption Perception Index, Moody's Credit Ratings or the Forbes
Magazine have to say. These Western institutions are ultimately meant to
create a Western-centric, alternative reality for the global
sheeple. Humanity needs to stop looking at the world through Western
prisms.

Once the reader can psychologically break free of the
alternative reality Western institutions have created, the
reader will begin recognizing the corrosive nature of Western influence and
begin seeing that its power and
influence is indeed currently in decline.

Having
squandered the good image is had come to enjoy during much of the 20th
century; having reached its political and financial pinnacle in the
years following the Soviet Union's collapse; American power and influence today is
clearly waning
and it will never get back to where it
was before its downturn because the historic circumstances that helped create its
ascent to the top of the world are long gone. If I were to put a symbolic date on Washington's
historic decline as a global power, I would date it to the summer of
2008. More specifically, August of 2008 -

It
was back in the summer of 2008 when the Russian Bear humiliated the
Western/Turkish/Israeli-backed criminal regime of Saakashvili and all
Western powers could do was sit back and watch in horror. It's been down
hill ever since as Washington has suffered one setback after
another. Virtually all of the Western gains in the south Caucasus and
Central Asia have been reversed.

In
an effort to regain momentum against Russia's resurgence Washingtonians
have embarked on a global PR tour. As I said, President Obama's visit to
China did not produce anything tangible. Washington's sudden conciliatory tone with regards to Tehran are signs of desperation and it will not yield tangible results. Vice-President
Biden's visit to Kiev did not go well, to say the least. Actually, Americans cant seem to get respect anywhere anymore. Even in
"allied" territory there seems to problems today. Here we see Turks
assaulting American servicemen in broad daylight -

Yes,
I understand that Turks will be Turks. But what does the rest of the
world think of Washington? Well, in a recent Gallup Poll that asked
people in 65 countries "what nation presents the largest threat to world peace today" the US came infirstplace. In an increasingly anti-American Germany, an astounding 40% of Germans support Russia's annexation of Crimea. Even within France, pro-Russian sentiments run high
particularly amongst those in the country who are tired of watching
France turn into a Third World cesspool as a result of post-war European liberalism. While
63% of Greeks dislike the US, 61% of them express positive views about Russia. 22%of Bulgarians want to abandon the EU and join the Eurasian Union. And a staggering 75%of Armenians view Moscow favorably.

Even in places where Russophobia runs deep, there is no real love for Uncle Sam. In a secret
recording a couple of months ago, Poland's Western trained foreign
minister (with a well connected Jewish-American wife nonetheless)
was heard describing in graphic detail what he thought of the nature of
American-Polish relations -

"You
know that the Polish-U.S. alliance isn't worth anything. It is
downright harmful, because it creates a false sense of security ...
Complete bullshit. We'll get in conflict with the Germans, Russians and
we'll think that everything is super, because we gave the Americans a
blow job. Losers. Complete losers."

Polish Foreign Minister, Radoslaw Sikorski

At
the end of the day, this Western trained Sikorsky's homoerotic
description of Poland's relationship with the US is a pretty good
indicator of just how deep (no pun intended) the Western empire's
friendships and alliances go these days. Outside of the
Anglo-American-Jewish world (i.e. US, Britain, Canada, Australia, New
Zealand and Israel) virtually all of the Western world's alliances are
based on financial/economic enslavement and bribes (i.e. aid money, that
which the Federal Reserve prints on an as needed basis). Once the US
Dollar eventually loses its luster (that which is maintained around the
world by military actions and that which will eventually end) the
Western order-of-things, along with its alliances, will all
crumble overnight. Remaining on the topic of Poland's Radoslaw Sikorski,
the following report that came out in the Russian press is very
revealing -

Sikorski's
Jewish-American wife is financed by Washington? Very interesting, but
not in the least bit surprising. Information like this simply reveals to us how
the Western political world operates. In high level politics, nothing is left to chance.
Every square millimeter of the world's political landscape needs to be
placed under control, one way or another. Therefore, Sikorski's marriage
with the well-connected American Jewess - who is also a well known war monger - was no doubt an arranged marriage by Uncle
Sam. Incidentally, Poland's Sikorski has two equivalents in
Armenia.

Opposition activist Alik
Arzumanyan married his American wife while he still had a very
influential position in the Armenian government. It would not surprise me one bit if it was discovered that Arzumanyan
also made
his living through his wife. The other political leader who is married
to a well connected foreigner is the "great Armenian patriot" Paruyr
Hayrikian. He wed his CIA-connected Jewess while he was still a Soviet
dissident. They have since divorced but they maintain family ties. Both he and
his wife (who currently lives in Boston with her Jewish kids) get
financial support from the US government essentially for the role they
played in destroying the Soviet Union, and in Paruyr's case, also for
representing Washingtonian interests in Armenia today.

Back to the main topic: Washington doesn't even seem to be getting much respect at
home. US Congress's approval rating is at a historic low. At a time when President Putin has been enjoying unprecedented popularity at home, President Barack Obama's popularity rating in the US hovers around a dismal 30%. Anti-government voices in American society is on the rise today. I am not talking about African-Americans. I am not talking about libertarians. Interestingly enough, one of the most vociferous anti-government groups are US military veterans.

Trouble
is brewing at home. Trouble is brewing in Europe. Trouble is brewing in
Asia. US power and influence is in steady retreat. Things are thus
getting very difficult for the self-appointed World's Policeman and westerners are beginning to see it -

The Western aggression against Russia is actually a by-product of a Western weakness that ironically comes about from being alone at the very top of the global food-chain. From
a Western perspective: Russia is too powerful, too technologically
advanced, too independent, too ambitious, too large and Russian
territory simply has too much natural wealth for one nation. From
a Western perspective: The Western world has exhausted much of its
natural wealth and it has become too finely developed during the past
twenty-five years.When you are at the very top, the only place left for you to go when your time comes is straight down. They thus see a serious, long term threat looming in the eastern horizon.The threat
cannot be left alone for the fear that it might develop into a global
competitor. That's a problem for the West because there is no place at
the top for two competitive giants. The Russian nation, much more so
than China, poses the number one geostrategic threat to the Western
political order. Western sanctions imposed on Russia - as well as the Western instigated civil wars in Ukraine
and Syria - need to be looked at as desperate measures to undermine
Russia's rise as an independent global power. The Western effort, drawing from past experiences against the Soviet Union, is a desperate measure to stop the
creation of a global counterweight to the Anglo-American-Zionist
alliance.

Russia needs to cut its umbilical cord

Mayer
Amschel Rothschild - the wealthiest man in history, the founding father
of international finance and the patriarch of the infamous Rothschild
dynasty - is best known for saying: "permit me to issue and control the money of a nation, and I care not who makes its laws."
Within a span of a single century, the Rothschild dynasty came to
control the finances of the Anglo-American empire, helped in the
destruction of the Russian Empire through its funding of Bolshevism and
funded the creation of the Zionist state of Israel. But the Rothschild
legacy would not end there. The financial paradigm of the modern world -
also known as the Western banking system - is the evolutionary
by-product of what Mayer Amschel Rothschild started some two hundred
years ago. When Western powers invade and annex nations around the
world, be it militarily, culturally or economically, one of the first
things they take control of are its banks. Consequently, virtually all
"Central Banks" on earth today (including Armenia's) serve the
Anglo-American-Jewish political order in varying degrees. And Russia is no exception.
During the Cold War the Soviet Politburo is said to have cooperated
with international bankers, which many people claim was actually the
reason for its demise. By the 1990s, Russia had been taken over by
international bankers. One of President Putin's greatest domestic
challenges during the past fifteen years has been against this internal
enemy.

The
exclusive ability to "issue and control" the money of nations around
the world is the Western political order's number one strength and their
most powerful weapon-of-mass-destruction. Until this ability of
theirs is not taken away, or at least reduced to a significant degree,
the Western political order will retain its global hegemony and will act
with reckless impunity. With that in mind, I think the following news
items are very important developments coming out of Moscow today: In
one of his finest hours, President Putin called for more self-reliance
for the Russian state and blamed currency speculators in Russia for the Ruble's recent troubles -

Predictably, the sanctions that the Anglo-American-Jewish global cartel has placed against the Russian Federation is
having the exact opposite effect of what they were seeking. The sanctions are
accelerating the inevitable by forcing Moscow to crackdown on Western assets inside the country. The sanctions have forced Russians to seek total self-reliance. The sanctions have forced Russians to seek even closer relations with
emerging economies around the world.
The sanctions have hardened Russia's stance on regional maters. The sanctions have helped in fomenting a drastic rise in Russian
nationalism as well as spawning hatred of the political West in ways the
Kremlin could not ever dream of doing. The sanctions have forced Russians to seek true independence, even in cyberspace. The sanctions have set Moscow on a course to finally cut its umbilical cord (i.e. dependency) with the West.

Fully cognizant
of the power the Western political order yields today I do understand
that the Russian Federation
may yet suffer considerable economic pain during its transition away
from the Western financial paradigm to a homegrown economic/financial
system based on the sound principles of nationalism and socialism. But
this pain is something Russia must endure for it will prove
greatly beneficial in the long term. To
ultimately free itself of financial and thus political bondage and servitude - and
realize the great potential that awaits it in the 21th century - Moscow must free itself of Western control.

What Westerners suffering from imperial hubris such as the editorial board of the Wall Street Journal
fail to understand is that the sanctions against Russia have started a
process that will eventually end up undermining Western power around the
world.
Despite what Forbes Magazine says, despite what Moody's Corporation
says, despite what any Western index shows, the Russian nation is stable
and secure. The sanctions will in the long run prove immensely beneficial to
Russia's economic, financial and political health. The sanctions will also help in the formation of a multipolar political world.
Therefore, take everything you have been hearing from officials,
political analysts and economic experts in the Western world with a grain of salt.
Despite their sanctions and despite their manipulation of oil prices to punish Moscow, the Russian Bear will not bow to Western pressure. The Russian President is enjoying the kind of popularity at home that is very
seldom seen. The Russian military is in the midst of a
historic modernization and rearmament program. The Russian state is on a
diplomatic offensive from the far east to the far west. I strongly believe that the modern Russian state will prove more resilient than its Soviet predecessor. The Russian nation will weather the current crisis and come out of it stronger than before.

There
was a time when the US Dollar was backed by gold and humanity
(including Soviet
peoples) looked up to the Western world. Today, the US Dollar is backed
by armed interventions around the world and the global masses look at
the West with fear and disdain. There was a time when the Western world
was the world's sole industrial power. Today, the Western world lives by
killing (i.e. creating wars around the world) and by imposing itself as the middleman
in global trade. Today, the Western world is nothing but a lavish house-of-cards. One well placed strike will bring down the entire system. Even some of the top financial gurus of the Western world, Jim Rogers and George Soros,
are beginning to recognize that the end of the road is near. The
imperial hubris of the Western global order will eventually make it collapse
under its massive weight. A new, multipolar world is slowly but surely emerging. In the opinion of many, including myself, the future - if there is one, after all this mess is over - will belong to Eurasia. If
the twentieth century was the American century, the twenty-first
century promises to be a Eurasian century. Baring any unforeseen
calamities in Moscow, I
firmly believe that Russia will be in the driver's seat - politically,
militarily and economically - within the twenty-first century. Many
nations around the world are beginning to see this as well.

"Corruption" in the Czech Republic

Western officials have been treating the
Czech Republic with white gloves
and great sums of money has been poured into it during the past twenty-five years. Soon after its political transformation over two decades ago, the Czech Republic was
turned into an epicenter for Western operations in central/eastern
Europe - as well as into an open-air whorehouse, but that's another
matter. Yet, despite all its
geographic and political advantages, the Czech Republic is apparently not doing
very well and that favorite Western catchphrase "corruption" seems
to be a major problem in the country. The BBC unexpectedly reported on this matter recently -

Prague
is within the Western political orbit. The topic of "corruption" would
therefore not have been covered by a major Western institution
like the BBC. I therefore suspect that something must have gone wrong
recently. Well, it apparently did. Upon a little research, it became glaringly obvious as to why the BBC had gone out of its way
to report on corruption in one of the Western strongholds in eastern
Europe. Apparently, President Zeman of the Czech Republic, like his
counterparts in Hungary and Serbia, were not being totally obedient to
Uncle Sam -

Therefore, the problem in Prague is not "corruption", the problem in Prague seems to be the weakening of Western control. As
I have said, as long as you whore yourself to Western powers you get a
free pass to do anything. Examples for this are many: Mexico, Columbia, Saudi Arabia, Qatar, Israel,
Pakistan, Myanmar, Albania, etc. If you, however, dare try to exercise politics
independently of the West or pursue polices that run contrary to Western
interests, you get targeted by hordes of Democracy Now(!) extremists - or
Islamic fanatics depending on what part of the world you live in.

And speaking of Islamic fanatics, is it not curious that Washington is
also in the business of promoting Islam in Czech Republic? -

Nevertheless, since the Czech Republic is still part of
the Western world in a political sense, and as long as it stays that
way, Prague's problems will not be exploited and used to foment a
regime change there as they have done in so many other places. In other words, as long as Prague remains politically expedient to the
West, don't expect Washington to foment any kind of sociopolitical
unrest in the country despite any of its internal problems.Therefore, the BBC report and the street protests are essentially meant
to warn Zeman's government and keep his government in order.

Closer
to home: In the eyes of Washingtonians, Armenia's real problem is not
"corruption" in the country, it's merely the lack of a Western presence in
the country. In other
words, had Armenia been one of their many open-air whorehouses around
the world, Armenians officials would do no wrong. With Russian boots in
the house, however, Armenians officials can do no right.

With
regards to "corruption" I have always maintained that generally
speaking nations like Armenia and Russia are no better or no worst than
any developing nation around the world. Moreover, the main, fundamental
difference between the developed West and the developing rest is the
simple fact that "corruption" in the West has evolved through
generations to become primarily institutionalized (i.e. reserved for the
political/financial elite). The Western world (primarily the
Anglo-American world) has historically had some of the most corrupt
regimes in the world. But centuries of relative peace and stability in
the West (i.e. the absence of chaotic regime changes that has plagued much of the rest of the world) has
helped it accumulate immense wealth that which has trickled down to the
masses and has helped it evolve a semblance of law and order.

With that said, what we need to keep in mind is that the
ONLY way to limit/curb corruption in ANY society is through good
education, good employment opportunities and, more importantly, through
long periods of peace and political stability.
To this I'll add that Western style "liberal democracy" is a very good
way to keep nations politically unstable, economically enslaved and
culturally in decline.

The
power of Western psy-ops is so that whether we realize it or not we
have all been conditioned to think that "corruption" or the lack of
liberal democracy in places such as Russia or Armenia is the main
problem. The stupid notion that if only corruption is fought against and
the lower masses are given a say in politics everything will be well is
misleading and ultimately dangerous. Fighting
corruption is like concentrating all of one's effort in treating the
symptom of an illness without ever attempting to cure its cause. And, needless to say, giving the masses a real say in politics is suicidal, especially for developing/emerging nations.
Distracting developing societies with such utter nonsense has in the
bigger picture been the Western world's greatest advantage over
vulnerable nations it has targeted in recent decades.Hungary looking East

Serbia recently honored
President Putin as a national hero during a military parade the kind of
which the Serbian nation had not seen in several decade. I
must admit however that the royal reception Serbians gave President
Putin was somewhat expected. What was not expected was Washington's
recent complaints against the government in Hungary. I suspect the reason
Washington has for its recent actions against Budapest are more serious
than it appears on the surface. I am sure there is more to the story
than what's being reported. I say this because American officials would
not have suddenly gone to such an overtly aggressive route with an
important regional player such as Budapest had Hungarian President
Viktor Orban's grave sin had simply been to have close economic/energy
dealings with Moscow. Needless to say, a lot of eyebrows have been
raised with the recent spat between Washington and Budapest.

Although
most European governments are meekly parroting Washington's Russophobic
narrative about Ukraine, a significant portion of the European citizenry sees the criminality of
the West in Ukraine and elsewhere. Being
that President Orban's government is quite popular with Hungarians and
that Hungary in particular is a pivotal nation in the region, I suspect
we will see more nations in the region following suit in the coming
years. Although it's a bit premature
to predict anything at this point, there are natural political tendencies that are working
against Western interests. This means trouble
for these are serious, long-term geostrategic problems for Western
officials. In fact, Hungary and Serbia are not the only concerns Western officials have in the European sphere. Georgia and Moldova are also becoming serious concerns.

The
tectonic shifts we are currently seeing in the geopolitical landscape
of the world today are in my opinion the natural progression of things
(i.e. nature's way or if I may, God's way of bringing balance and order
to human ecology).

But, for Western officials, it was not meant to be this way.

Almost
twenty-five years after the fall of the Soviet Union in Europe, Russia
has grown very powerful once again; parts of war torn Ukraine have been
brought back under Russian control. EU/NATO member Hungary, EU/NATO
member Bulgaria, EU aspirant Serbia, EU aspirant Moldova and EU aspirant
Georgia clearly seem to have set a political course that will taken them
back to Moscow. And NATO member Turkey is becoming too dependent on
Moscow. These
historic shifts away from the West may be the
reason why twenty-five years after the fall of the Berlin Wall (the dismantling of which was not supported by the West at the time), a new
wall is forming but this time it is being erected by Western powers.

More
importantly, twenty-five years after the fall of the Berlin Wall,
former Soviet republics - perhaps with the notable exceptions of Baltic
states and Poland - are increasingly beginning to come to the
realization that Westernization/Americanization/Globalization is a new
and more powerful form of Bolshevism and that membership or
participation in Western structures such as IMF, NATO and the EU are
detrimental for the natural development of their nations.

In other words, the sudden disappearance of the Soviet Union almost twenty-five years ago did not meet utopian expectations, to say the least. This is the context within which recent developments regarding Hungary and elsewhere should be viewed.

An
extension of the Hapsburg Dynasty of Austria, Hungary started the
twentieth century as one of the wealthiest and most powerful empires in
the world. By the end of the Second World War, Hungry had entered
Moscow's orbit as a communist republic and a member of the Warsaw Pact.
Like their Polish and Yugoslavian counterparts, Hungarians lived pretty
well under communism. But by the mid-1980s, when the Soviet union seemed
susceptible for a collapse, the relentless lure of the Western
lifestyle proved too much for anyone to resist. Budapest was amongst the
first to break from Moscow. With a lot of wide-eyed anticipation and
great expectations, Hungarians, like so many other former Soviet
peoples, embraced the Western world. This unconditional embrace of the
West proved to be a serious vulnerability for these nations for it
allowed Western powers a free hand in the region.

That was then, this is now.

A
lot has changed in the world since the Soviet collapse, a period in
time that gave the victorious political West unprecedented powers over
humanity. A
lot has changed since the days when Western powers would act around the
world with impunity. A lot has changed in the world since the days when
a global superpower like Russia had been turned into a failed state
under the threat of breaking apart into several states.

Hungarians
may have finally come to the realization that living under Western
powers came at a terrible cost to their political sovereignty, their
economy and their national culture. Hungarians may have finally come to the realization that the Western world was nothing like what they had seen in Hollywood blockbusters all their lives. Hungarians may have finally come to the realization that
affordable electronic gadgets, blue jeans and rock-n-roll were not the
only things that the Western lifestyle had in store for them. Hungarians may have finally come to the realization that sexual decadence, pedophilia, child pornography, poor education, abject poverty, dysfunctional family life, political
empowerment of minorities, police brutality, political empowerment of
society's fringe elements, elitist political system, wealth gap,
multiculturalism, interracialism, metal illness, high rates of suicide,
high rates of rape, high rates of crime, proliferation of hazardous
pharmaceuticals, junk foods, drug addiction, political corruption,
veneration of Jews, encouragement of third world emigration, militant
atheism and state sanctioned promotion of homosexuality were even bigger part of the much coveted Western lifestyle.

More importantly, more-and-more people are coming to the realization that
"democracy" or "liberalism" were not the "secret" to Western power and wealth but war plunder and exploitation of man. If, relatively speaking, Westerners
today are living happy, carefree lives its because their
governments have brought slavery, death and destruction to the far-corners of the
world for the past few centuries. If
Westerns can enjoy affordable high quality goods, it's not because of a
wonderful democratic system, it's the result of exploitation of human resources around the world. If
Westerners
are living happy, carefree lives in recent years it's because for generations their
parents, their grandparents and their great grandparents toiled like
slaves for the nation's elite before
some of the accrued wealth began tricking down to the masses. This is
especially so in the Anglo-American heartland of the western world, where
the average citizen lived not much unlike a serf until modern times.
That the happy-go-lucky lifestyle in the
West today is gradually coming to an end is a discussion that is beyond
the scope of this
commentary.

Ultimately,
2008 proved very pivotal in that two major events occurred during that
year. It was 2008 that saw the awakening of the Russian Bear from its
two decades long hibernation and it was 2008 that made the West's
vulnerability apparent when the economic/financial crisis descended upon
the Western world. Events of 2008 conveyed
to nations around the world that Russia was no longer going to be a
passive power and that the Western world was not invincible after all. In my opinion, these had far reaching geostrategic implications for these two major events that occurred in 2008 have been shaping world events ever since.

With
Washington recently growing ever more audacious and aggressive in Europe and pushing front line
nations in the region into direct confrontation with Russia, it was only inevitable that there
would be some push-back. It is now very apparent that Budapest and Belgrade are the ones pushing back.

Nevertheless,
although as an Armenian I despise what Viktor Orban's government did
two years ago when they prematurely set free an Azeri scum who had
murdered a young Armenian officer in his sleep, in the bigger
geopolitical context, I am glad Europe has governments like the one in
Budapest that are willing to stand up to Western aggression because in
the big picture the "Western lifestyle" and Western powers are threats
not only to Russia, China, Iran and Venezuela - but also to Armenia and to the rest of mankind in general.

Serbia looking East

Two
decades ago Yugoslavia fell victim to
geostrategic calculations formulated in Washington, Brussels and London.
Fifteen
years ago, Serbia was mutilated essentially because it was the last
pro-Russian bastion in Europe. The
Western
aggression against Serbia in the Balkans came at a time when Moscow was
down
on its knees and on the verge of a total collapse. Russia could
only watch as a natural ally like Serbia was mercilessly bombed by NATO
and one of its historic regions forcefully severed from it and
placed essentially under Turco-Islamic rule. Incidentally, the Balkans in the 1990s was also one of the several war zones where Western
intelligence agencies worked hand-in-hand with Al-Qaeda terrorists.

Serbia was eventually bestowed the unfortunate honor of being the first victim of a
successful Color Revolution. Serbia has since been utterly saturated by Western funded operatives
and
subversive agencies. The manner with which Serbia was severed and a
West-leaning government placed in power in the country has in fact become a blueprint for Western operations
elsewhere in the world. In fact, the so-called "Arab spring" followed the same template. What the
West perfected in Serbia are being executed in places such as Venezuela, Syria, Libya, Iran,
Egypt,
Ukraine, Armenia, Russia and more recently in Hong Kong.

Many of
Armenia's political opposition movements such as Pre-Parliament are part of the same mold.

Having
had enough of Western style corruption and oppression, two years ago Serbians elected a
nationalist president who had publicly promised better relations with Moscow. The great nation of Serbia thus began waking-up from its Eurotic nightmare -

The promise made by President Tomislav Nikolic back in 2012 was finally manifested
when the Russian President was the guest of honor at a recent military parade in Belgrade, the first of its kind in thirty years. Serbian officials reaffirmed their commitment to the Russian-sponsored South Stream gas pipeline project which has since been put off. Russian officials reaffirmed their commitment to support Serbia on Kosovo. To cap it off, Serbia conducted military drills with Russia. The signs out of Belgrade are unmistakable. Serbia is on an Eastern path.

President
Nikolic's election victory two years ago and President Vladimir Putin's
recent appearance at a military parade in Belgrade can
be marked as turning points for Serbia for they are major victories for Serbian nationalism and a strategic success
for Moscow. In my opinion, it's no longer a matter of if Belgrade will be bringing Kosovo back under its fold but simply a question of when. Before any of this happens, however,
Serbians need to thoroughly cleanse
Serbia of its Anglo-American-Zionist infestation.

Armenians
would do well to recognize that the tragic fate that
befell Serbia
in 1999 - with its NATO bombing and the loss of its historic province
of Kosovo - was a fate that would have befallen Armenia as well had the
south Caucasus not be so crucially important for Moscow.Had
it not been for Moscow and its close allies in the Armenian government
during the past 15 years, Artsakh, and most probably portions of
Zangezur, would have been part of Azerbaijan and/or Turkey today and the Armenian nation would
have been subservient to Ankara, at least economically. The military
wing of Western oil and gas interests - NATO and the regions Turkic/Islamic terrorists - would have made sure of it.
I thank God that Armenian officials have been mature enough to recognize the
paramount importance of having Russian boots on the ground in Armenia. With that said,
I'm very glad to see Serbians coming back to their nationalistic
senses.

Bulgaria looking East

One of the
many nations within the "Western" sphere that is tethering on the
brink of disaster is Bulgaria.
The Christian Orthodox, Slavic nation that has had over two centuries of close
ties with Russia is torn between East and West. Just like in much of eastern Europe,
the irresistible lure of the Western lifestyle proved to be an illusion. Bulgarians are not happy with their government's Western orientation. Corruption in Bulgaria
today is rampant, even western Europeans are participating in it. Crime,
unemployment, energy costs are very high. Hundreds-of-thousands of Bulgarian
are fleeing their country to the EU's power-centers (i.e. France, Germany
and Britain).
Similar to Greece, which has
been systematically reduced to being a subsidized nation barely making a living
on German handouts, EU/NATO member Bulgaria is on the verge of
becoming a failed state. The following is a closer look at some of Bulgaria's
problems as reported by Western sources -

Interestingly,
in stark contrast to Western news reports about Armenia,
reports about Europe's most destitute nations
are seldom covered in detail by mainstream news agencies or Western NGOs.In
other words, they can't complain about Bulgaria's "oligarchs"
because all of Bulgaria's
biggest "oligarchs" reside in Brussels,
London and Washington. They cant even blame Moscow this time.
Therefore, there is no Western agenda to foment political unrest or a regime
change in places such Bulgaria.
As a result, Western propagandists avoid seasoning news stories with political
incitement. As messy as Bulgaria
is, as far as Western officials are concerned, Bulgaria
is slowly developing and progressing... because it is bending-over to Western
institutions and not Moscow
or anybody else.

Despite the
best face they put on it, the reality of the matter is that Bulgarians are
utterly disillusioned by their Western orientation. BBC recently fear
mongered about the Bulgarian military's
continuing ties with Russia.
And despite the fact that their political and financial/economic system is in
Western hands, they could not hide the fact that 22% of Bulgarians favor abandoning the EU and joining Russia Eurasian Union.
Even if this poll result is proven to be accurate, the cited figure of 22% is
very large considering Bulgaria's
circumstances. In their haste to expand Western borders to the doorstep of
Russia, they incorporated a number of nations like Bulgaria that will prove
very problematic for them in the future.

Moldova not allowed to look East

Much
of what I described for Hungary, Bulgaria and Serbia applies to Moldova
as well. The small, landlocked nation wedged between Ukraine and
Romania has also been adrift in a turbulent post-Soviet sea. While the
nation's natural tendencies gravitate it towards Russia, a strong,
opposite pull from Western institutions and activists in the country is
unmistakable. Also let down by the shattered dreams of Western
orientation, Moldovans have been gradually seeking reorientation with
the East.

Due
to Moldova's very strategic location, the Moldovan people's desire to
have closer relations with Moscow proved too much for Western powers to
bare. Faced with yet another looming geopolitical disaster in Europe, we
very recently saw the ugly face of Western-style corruption reveal
itself once more. Moldova's pro-Russian vote was blatantly stolen
by essentially those who have been preaching "free and fair elections"
around the world. While a tactical victory of sorts, this egregious
manipulation of the pro-Russian vote in Moldova will prove
counterproductive for Western powers in the long term. Needless to say,
don't expect CNN or the BBC to spend the next month or two talking about
this election violation.

Simply put: Moldovans are not being allowed to look East by the forces of "freedom and democracy".As
I have been proclaiming for many years now, faced with insurmountable
obstacles around the world, the Western political order is slowly
revealing an ugly face that has long been hidden behind an appealing
mask. The Soviet Union may have been primitive in many ways, but the Western political order is evil and destructive in many ways. It's high time for humanity to wake-up and see the political West for what it truly is.

Being
stupid during the Cold War was somehow excusable because there
seemed to be something more ominous on the other side of the iron
curtain.
Being stupid today, in this age of information, especially after what we
have seen Western powers do in places such as Venezuela, Argentina,
Serbia, Afghanistan, Iran, Iraq, Libya, Egypt, Syria and Ukraine is
totally inexcusable!

Georgia looking North? For
years there has been talk in Moscow about the revitalization of a major
Soviet era railway project in the Caucasus. The main purpose of this
Moscow-sponsored initiative was to tie south Caucasus nations to Russia
via a broad trade network that would also include motorways and perhaps
extend to Iran
as well. These projects, strategic in scope, have gone beyond talk in
recent years. In fact, a lot of money has already been spent on them by
interested parties and much more is being promised. In fact, some work
on the project had already begun in Abkhazia and Armenia. Looking at the
picture, however, one could immediately see a major problem: Georgia is essentially the missing link.
Georgia is absent in a rail and road network that is envisioned to
stretch from Russia to Iran traversing Abkhazia, Georgia and Armenia. Relations between Moscow and Tbilisi have actually been down right hostile during much of the past ten years. This
raises an obvious question: Why would Moscow embark on such a grandiose
project if Georgia would not be part of the equation?

It is obvious that such a project could only be realized after normalization of relations between Tbilisi and Moscow, and
it is equally obvious that Moscow would not have spent all this effort
on the project in question had it's future been unpredictable. In my opinion, it can therefore be safely speculated that Moscow was quietly working on and expecting a reversal of course in Tbilisi.The following is a chronological look at events-

Russians actually started working on portions of the railroad just before the Russo-Georgian war. When
Russian troops
crushed the Georgian military and liberated Abkhazia and South Ossetia
in a matter of two or three days in August, 2008, it became very
apparent that after nearly a twenty year hibernation the Russian Bear
had finally set its sights back onto the troublesome south Caucasus. By 2009, it became obvious that
Moscow had serious plans for the Western-backed dictator in Tbilisi. By 2011, is become obvious that Saakashvili's regime was not doing well. By 2012, the wealthiest man in Georgia, a man who had made his money in Russia and one who had good relations with Moscow was in power. With Ivanishvili's arrival, Saakashvili was exiled to Brooklyn. With Saakashvili's departure, Tbilisi began a tedious/arduous process of mending its ties with Moscow and rooting out Western operatives inside the Georgian government. The most recent example of this was the dismissal of Georgia's West-leaning Defense
Minister, Irakli Alasania. With Moscow becoming a major factor in Tbilisi once more, Western propagandists are fear-mongering.
Recent news reports indicate, however, that the Moscow sponsored
railroad project is moving fast forward now that the Eurasian Union has
become a viable factor in the region.

These
are all very positive signs that Georgia's gradual
departure from its disastrous Western-orientation is well on course. Tbilisi is gradually warming
to the idea of becoming an integral part of a Russian-led trade network in one way or another. It was only a matter of time before the
government
in Georgia would be brought to its good senses… because there was a
real chance that Tbilisi would also lose its Armenian populated region of Javakhq.
From Tbilisi's perspective, seeking better relations with the Russian
Bear was therefore simply a matter of political sanity and an
inevitability. Facing
further political disasters, Georgian officials accepted the realities
of south Caucasian realpolitik -

For nearly ten years Georgians foolishly placed trust in Westerners, Jews and Turks and
turned against their northern and southern neighbors. While they could
have gotten away with their anti-Armenian policies, their anti-Russian
policies proved to be their undoing. Similar to the plight that befell Serbians and Ukrainians,
the Georgian pursuit of Western fairytales destroyed their nation
(Abkhazia and South Ossetia are forever gone, Javakhq and Ajaria have
the potential of seceding). Tbilisi needed to stop its political
mistakes before it ruined Georgia.

At the end of the day, thestatus quo in Abkhazia,
South Ossetia and Nagorno Karabakh will remain as is. Tbilisi and Baku will dance to the music coming out of the halls of the Kremlin. Sooner or later, in one way or another, there will be a rail link between Armenia and Russia. Sooner than later, Tbilisi
and Baku will be either absorbed fully into the Eurasian Union or simply made
to cooperate with it. According to recent reports, Georgia seems to be half way there already. In a
historical context, Georgians and Azeris lose, Armenians and Russians
win.

I
never thought I would say this, but Armenians have proven to be
much smarter that Georgians and Azeris put together. But in rejoicing
let's also keep in our minds
that we continue to have our share of suicidal idiots. The main
difference between our idiots and their idiots is that their idiots are in government whereas our
idiots are in the political opposition. Many of Armenia's
Washington financed political activists like Paruyr Hayrikian and Raffi
Hovanissian wanted
Yerevan to pursue a suicidal Georgian route.
Moreover, generally speaking, Armenians were in awe of everything about
Saakashvili's Georgia. Awash in tens-of-billions of dollars in
loans from Western, Turkish, Jewish and Arabian sources, Georgia was
dazzling in lights for a
while and Armenia's self-destructive peasantry was astonished. Despite
the glitter and the perception of progress in Tbilisi, however, those
who
understood history and the natural tendencies of regional geopolitics
predicated that the Georgian fantasy
would sooner or later come to an abrupt end. It came much sooner than
thought.

Placing
Georgia within the Russian fold thereby severing it from the clutches
of Western oil corporations, Turks, Azeris and Israelis will greatly
benefit Armenia and regional peace. Landlocked and blockaded by two predatory neighbors,
Armenia's most promising border connection proved to be its weakest
geographical link for the past twenty-five years. The free flow of regional trade is one of the ways in which Pax Russica in the south
Caucasus will prove extremely beneficial for Armenia. We are certainly heading in
that direction. Washington and its lemmings inside Armenian society will certainly try to sabotage it. Nevertheless, all sides recognize that better Russian-Georgian relations is key to Armenia's economic and thus political health. If Armenia
is not to have
common borders with Russia, it must have Georgia within the Russian
orbit. Tbilisi is headed in that direction. Pax Russica in the south Caucasus is one step closer.

Turkey looking North?

Although mainstream news media outlets in the US are trying their best to characterize Moscow's
abandonment of the strategic South Stream pipeline project and the
recent deal it reached with Ankara as a "diplomatic defeat" for President Putin,
the reality of the matter is that Moscow's move was a very serious setback
for Western powers. In fact, it was a brilliant move by the Kremlin in my opinion.
The South Stream was meant to provide south eastern Europe with Russian
natural gas. Regional nations - Serbia, Hungary, Bulgaria, Austria,
Italy, Greece - were very enthusiastic about the project... but not
Brussels, London or Washington. By
pulling back (perhaps ostensibly) from the South Stream project and
reaching a deal with Ankara instead, Moscow is punishing the EU. It is
also luring Ankara further way from Western powers and creating a real
potential
of a clash
between European nations affected by the matter and Western powers.
Bulgaria, perhaps predictably, has been one of the first ones to raise its voice of concern. More nations affected by this development will surely follow.

And there are yet other serious geopolitical ramifications to closer economic ties between Russia and Turkey.

The
Russian-Turkish deal is a serious insult to Baku and Kiev for it
signals less Turkish support for both nations. More importantly, Western
powers are in danger of losing more leverage over Ankara. Some of the
readers may recall that back in the autumn of 2008 NATO came close to
losing Turkey. Fearing at the time Moscow would send its tanks all the
way down to the Georgian-Turkish border, a panic-stricken Ankara placed
its bet with Mother Russia and began signalling that it was ready to
abandon NATO and seek closer ties with Moscow. It was at this time when
Ankara put aside its pan-Turkic pride, sent President Abdullah Gül on an
official visit to Yerevan and announced its intention to form a "Caucasus Union", envisioned to include Russia, Turkey Georgia, Azerbaijan and Armenia -

This fit perfectly within Moscow's
grand geostrategic agenda in the region. Moscow had been trying to lure
Ankara away from NATO as a part of Russia's historically successful
divide and conquer approach to regional politics for some time.
And to put this all in an Armenian context, I'd like to remind the
reader once more that despite Moscow's very lucrative trade deals with
Ankara during the past two decades, Moscow has not stopped recognizing
the Armenian Genocide, Russian officials have not stopped from appearing
at the Armenian Genocide memorial in Yerevan - nor has it stopped the
Russian military from paying less attention to the security of the
Armenian-Turkish border. Unlike
in the Western world, where virtually everything has its price, Moscow
approach to regional politics is based on its national security needs, and Armenia is an integral part of Russia's national security.
Moreover, the further Ankara drifts away from Western powers, higher
the chances that it will suffer serious repercussions. After all,
Western powers and Jews still maintain quite a bit of influence in
Turkey, especially amongst its secular population, especially within its
industrial sector.Ultimately,
Moscow may or may not succeed in luring Ankara out of NATO. I
personally do not think it will happen because taking Turkey out of NATO
without destroying it in the process cannot be done. Regardless of what
may or may not happen with Ankara's NATO membership, what is important,
from an Armenian perspective, is Turkey's increasing reliance on
Russian trade and energy. After all, Russia is the dominant force in the Black Sea region
and its clout is continuing to grow. Russian-Turkish trade is primarily
one way - Russian energy to Turkey's energy starved economy. In other
words, Turkey needs Russia more than Russia needs Turkey. Better
relations with Moscow will in fact force Ankara to abandon its
Pan-Turkic and/or Neo-Ottoman wet-dreams in the Caucasus.With
better relations between Moscow and Ankara, the Armenian-Turkish border
may just open after all. After all, the so-called "protocols" were at
least in part a Russian agenda -

Moreover,
the recent agreement between Moscow and Ankara, in conjunction with the
heightened tensions between Moscow and the West, may also result in
Western powers placing more emphasis on Baku and the Western-funded
Nabucco pipeline which
is Europe's only source of Central Asian energy that does not pass through Russia. This
will make Baku's
already difficult geopolitical situation suddenly more complex and
Sultan Aliyev will automatically become even more vulnerable in the eyes
of Western powers, Moscow, Tehran and
Yerevan - and less important in the eyes of Ankara. Such signs are already appearing. I have a gut feeling that recent development in the region, as well as falling oil prices, will cause very serious problems for the dictatorship in Baku.

At
the end of the day, despite the West's wishes, Russia will not be
brought down to its knees be it financially, economically or militarily.
At the end of the day, Europe still needs
massive supplies of natural gas. The Russian Federation is still the world's number one natural gas
provider. Don't believe the bullshit coming out of Fox News, liquified natural gas or shale gas from the US
is currently not nor will it ever be a
viable and/or practical alternative to Russian energy for Europe. And
the construction of new pipelines from the Middle East to Europe
is still very, very far away... if at all possible -

Thanks
to Western aggression and machinations, the entire Middle East has been
turned into one big bloody battlefield and there seems no end in sight
for the cycle of ethnic and religious violence there. Today's carnage will bare bad fruit for generations to come.
Europe can forget about replacing Russian energy with Middle Eastern
energy for the foreseeable future. If Moscow follows through and
actually abandons the South Stream project and reroutes its pipelines to
Turkey, the EU will have screwed itself. The EU will have in fact been
screwed by Western miscalculations and political blunders. Europeans will still have to
purchase Russian natural gas - but now from Turks and at a higher price.
With that said, I personally think the South Stream project may still
be revived. Nevertheless, the more troubles Ankara has with the Western
powers, the better it will be for Russians and
Armenians. The Turkish state will sooner-or-later fall apart and
Armenians will reclaim what belong to Armenia. For now, however, we need
to concentrate on strengthening the Armenian statehood we have today. And
one of the ways with which the Armenian statehood will be strengthened
is through the unconditional opening of the Armenian-Turkish border,
within the context of the Russian-led Eurasian Union.

We are living in historic times

Merely twenty five years after the collapse of the Soviet Union we are living through historic change once more. This time around, however, the impending change may eventually prove more fundamental in nature.
Humanity may finally succeed in breaking from the post-Napoleonic era's
Anglo-American-Jewish paradigm and enter into a multipolar one.
As the political epicenter of the world shifts eastward, so with
prosperity. Only with the Western political order out of the way will projects that hold great potential for humanity will become realized. Needless to say, it will not be a pretty journey. Now that the Western
political order has effectively become the Sick Man of the world, we
will see increasing bloodshed. As another Sick Man in history has shown, terminally ill political systems based on
militarism, exploitation, arrogance and illusion do not quietly fade into history. We have a problem in the world today because Western power and influence is far reaching.

Cecil
Rhodes, the ardent British imperialist, mining magnate and one who
masterminded the creation of the Anglo-American empire, once looked up
to the heavens and said -

"I would annex the planets if I could"

While
the inheritors of his grandiose imperial vision have not been able to
annex the planets, they have managed to annex, in one way or another,
much of the world we live in today. For the past two hundred years humanity has been living in an Anglo-American-Jewish era. The aforementioned trinity permeates virtually every single aspect of life on planet earth today.
If they had their way they would even "privatize" and tax the air we
breath as well. Well, come to think of it, the Western crusade against
"climate change" is in fact closely related to their imperial desire to
control the air we breath through their laws and their taxes.

Their ability to influence course of events in faraway lands are unprecedented in human history. They have the powerful tools - political, military, psychological, cultural, financial and organizational
- to manipulate and exploit societies across the world. They
have powerful news
media outlets to disseminated Western propaganda. They have a massive
array of well-funded NGOs championing all
kinds of causes that serve all kinds of Western interests. They have the
financial
means to bribe officials and
enslave nations. They control the commodities trade. They control global
trade routes. They control the creation and dissemination of money
around the world. They have an all-powerful
music and film industry to craft human behavior.
They have provocateurs and hitmen ready to incite unrest whenever and
wherever needed. They have professional agents working behind-the-scenes
under the guise of "journalists", "aid workers", "humanitarian
activists" and "environmentalists". They have the highly refined tools to
mesmerize, stupefy and create an alternative reality for the global
sheeple. Consequently, they have a great multitude
of brainwashed activists around the world to organize "opposition"
groups and take to the
streets every time their spiritual leaders and financiers in the West call on them -

Russia, Iran, Venezuela, China and Armenia have been some of their most persistent targets.

Speaking
of Armenia: With official entry into the Russian-led Eurasian Union
just a few weeks away now, Uncle Sam's operatives in Armenia are getting
increasingly desperate - as was predicted. Last week, "Preparliament"
members got their automobiles set on fire (most probably done by them to
attract media coverage and gain public sympathy). Now, the same are
claiming that they will attempt a regime change in Armenia - by the use of arms if need be! And when are these Western-financed terrorists planning to carry out their violent revolution? Next April 24, on the 100th anniversary of the Armenian Genocide of all times!
Alarmingly, they are also implying that the murder of Armenian security
officials and politicians is justified now because the two serve
foreign interests (i.e. Russian interests) -

As
you can see, Armenia's self-destructive peasantry are once again ready
and very willing to burn down their village to save it from imaginary
monsters. Very surreal indeed.
Even more surreal is the lack of outrage amongst Armenians at
statements made by Preparliament representatives. I say, perhaps the
killing of Preparliament members is now justified as well, specially
since their actions in Armenia directly serve the interests of Western
powers and Turks.Although
they speak of "nationalism", "human rights" and "civil society", these
characters are wolves in sheep's clothing. These characters serve
foreign masters and are in fact the enemies within. It is their kind
that has ruined Armenian statehood time-and-again. It is their kind that
has turned Armenia into a desolate battlefield time-and-again. It is
their kind that has kept Armenia torn between great powers. It is their
kind that murdered and beheaded the great Mkhitar Sparapet and presented
his severed head to the Turkish Pasha as a peace offering.

Representatives of Preparliament - along
with Paruyr Hayriikyian's National Self-Determination Union, David
Grigorian's Policy Forum Armenia, Raffi Hovanissian's Heritgate Party
and Vartan Oskanian's Civilitas - represent the single greatest threat
to Armenian statehood for they are cancerous cells within the Armenian
body.

I'm
now actually looking forward to the day when these vermin try to do
what they are promising for that will most probably be their final end.
With that said, it should also be said that these people are as impotent
as they are pathetic. They bring a Shakespearian quote to mind: Full of sound and fury, signifying nothing.
Their time has in fact passed. Their best chance for a Color Revolution
was in early 2008. Back then, a few of them were shot down, the rest
fled for their lives. Today,
these vermin would be lucky to get several thousand prostitutes,
homosexuals, senile seniors, pedophiles, clueless peasants, ignorant
adolescent, lunatics and professional Western mercenaries out to the
streets.

These
types of "democracy" movements we are seeing spring-up around the world
today
appeal to the lowest, most primitive instincts of mankind. Let it
surprise no
one therefore that advocates of such movements in developing or
underdeveloped nations tend to be those on the fringes of normal
society. In their personal quest to bring about change (change within
which they would feel better for themselves), often times homosexuals,
open or otherwise, become leading activists for such movements. We see
this process in Armenia as well. Nevertheless, similar
to Bolshevism one hundred years ago and Christianity
before that, Western-led democracy movements today
appeal to the disgruntled masses of the world with false promises of a
better life. Similar to what Bolshevism
was one hundred years ago, democracy movements today are weaponized and exported to targeted
nation - nations of the world that are not subjugated by Western financial
institutions or nations that are not under the Western boot.

On
the eve of the one hundredth anniversary of the First World War,
Russian lands are once again under attack by corrosive ideological
movements formulated in and promoted from Western lands.
"Westernization" and "Globalization" are new and more potent forms of
Bolshevism that should be fought against by all of humanity. In a larger
context, this is not only Russia's fight - this is humanity's fight. This is indeed a fight between good and evil. I pray for
peace - but I hope Kremlin
officials are getting their big guns ready just in case, because we simply cannot afford a replay of 1917.

In
closing, I would like to remind the reader that we are living in a
very interesting period in human history and very turbulent times are ahead. If Western powers are unable
to subdue Moscow through measures they have currently adopted, they may resort to more drastic measures
out of desperation. There is a real risk
that if Moscow is not made to comply with Western dictates through a
renewed cold war (i.e. political, financial and/or economic measures) they may
transform their effort into a hot war.

Why do I think this is a very real
risk? Simply because Western powers are too wealthy, too well-fed and too
blinded by their perceived strength and arrogance to allow upstarts like Russia to weaken their global hegemony. They realize that they are in a serious predicament: If they
cannot secure a position at the very top of the global food-chain, they may have to sink all the way to
the bottom. In their neo-imperial pursuit of total global dominance - Russia is the only political entity on earth standing in their way. If threatened, a gluttonous monster who has been unchallenged in the world can be very
dangerous animal indeed.With that said, I predict that the monster in question will be either tamed or killed.The only thing today that is saving mankind from total subjugation by the Anglo-American-Zionist global order is nuclear deterrence: Moscow's willingness to use its nuclear arsenal if threatened.
I personally believe that the increasing threat of a nuclear
catastrophe will force Western officials to calibrate their actions
against Russia. Russia
will therefore persevere. Washington will continue losing its outposts
throughout Eurasia in the coming decades. Western power and influence
will diminish. Western-funded usurpers around the world posing as
"democracy" movements will gradually lose their luster. A multipolar
world will emerge from the current turmoil. Although Western control around the world is gradually diminishing, imperial officials in Washington still think they should own the world. Therefore, the assault against nation-states that do not comply with Western dictates will continue. After all, as all trigger-happy American policemen,
Uncle Sam's self-appointed role as the World's Policeman has proven to be a very
bloody affair indeed. Its demotion from that role may
be an even much bloodier affair still, but it has to be done for the greater good. It will be done.

ArevordiDecember, 2015

***

Should America Continue Being the World’s Policeman?

Bush did too much and Obama too little—but a ‘broken-windows’ model of U.S. foreign policy can be just right

When it comes to U.S. foreign policy, Americans must sometimes feel like
Goldilocks in the three bears’ house. The porridge that was President
George W. Bush’s “freedom agenda”—promising democracy for everyone from
Karachi to Casablanca—was too hot. The mush that has been President
Barack Obama
’s foreign policy—heavy on rhetoric about resets, pivots and
engagement but weak in execution and deeply ambivalent about the uses of
U.S. power—is too cold.

What we need instead, as the fairy tale has it, is a foreign policy
that is just right—neither too ambitious nor too quiescent, forceful
when necessary but mindful that we must not exhaust ourselves in utopian
quests to heal crippled societies.

The U.S. finds itself today
in a post-Cold War global order under immense strain, even in partial
collapse. Four Arab states have unraveled since 2011. The European Union
stumbles from recession to recession, with each downturn calling into
question the future of the common currency and even the union itself. In
Asia, China has proved to be, by turns, assertive, reckless and
insecure. Russia seeks to dominate its neighbors through local proxies,
dirty tricks and even outright conquest. North Korea’s nuclear arsenal
and Iran’s effort to develop one tempt their neighbors to start nuclear
programs of their own. And even as the core of al Qaeda fades in
importance, its jihadist offshoots, including Islamic State, are
metastasizing elsewhere.

As for the U.S., the sour experience of
the wars in Iraq and Afghanistan has generated a deep—and
bipartisan—reluctance to interfere in foreign conflicts, on the view
that our interventions will exact a high price in blood and treasure for
uncertain strategic gains. One result is that aggressive regimes seem
to think that they can pursue their territorial or strategic ambitions
without much fear of a decisive U.S. response. Another is that many of
our traditional allies, from Israel to Saudi Arabia to Japan, are
quietly beginning to explore other options as the old guarantees of the
postwar Pax Americana no longer seem as secure as they once were.

How
should an American president navigate through this world of ambitious
rogues and nervous freelancers? How can the U.S. enforce some basic
global norms, deter enemies and reassure friends without losing sight of
our global priorities and national interests? How do we conduct a
foreign policy that keeps our nightmares at bay, even if we can’t always
make our dreams come true?

When it comes to restoring order in
places widely assumed to be beyond the reach of redemption, there is a
proven model for us to consult. But it has nothing to do with foreign
policy; it has to do with policing our toughest inner cities. And it has
brought spectacular—and almost wholly unexpected—results.

The year 1991 was a year of foreign policy triumphs for the U.S.,
from victory in the Gulf War to the collapse of the Soviet Union. But it
was the annus horribilis for American crime, with nearly 1.1
million aggravated assaults, 106,590 forcible rapes and 24,700 murders.
In every category, crime was up from the year—and the decade—before. As
late as 1995, some criminologists were predicting that a new wave of
“super-predators” would descend on American neighborhoods. “If current
trends continue, the number of arrests of juveniles for violent crimes
will double by the year 2010,” reported the New York Times, citing a
Justice Department report.

“Current trends” did not continue.

In
1990, New York City registered a homicide rate of 30.7 murders for
every 100,000 people. By 2012, it had fallen to a rate of 5. A similar,
if slightly less dramatic, story unfolded in every other major U.S.
city. The social deliverance happened despite the fact that many of the
factors often cited to explain crime—bad schools, broken homes, poverty,
the prevalence of guns, unemployment—remained largely the same from one
decade to the next.

What happened? The crack epidemic crested in
the early 1990s. The police began developing new techniques to track
and control patterns of criminal activity. Between 1992 and 2008, the
number of law enforcement personnel rose by 141,000, a 25% increase, and
from 1990 to 2000, the adult incarceration rate nearly doubled. More
cops on the streets; more bad guys behind bars. It was bound to have an
effect.

Their
core insight turned on a social-science experiment conducted in 1969 by
Philip Zimbardo,
a psychologist at Stanford. Dr. Zimbardo parked a car on a street
in the Bronx, with the hood up and without license plates. Within 10
minutes, vandals begin to pick the car clean of its valuables: battery,
radiator, tires. By the next day, people began destroying the car,
ripping up pieces of upholstery and smashing windows.

Dr.
Zimbardo then conducted the same experiment in tony Palo Alto, Calif.,
near the Stanford campus. This time, the car—also with the hood up and
the license plates removed—sat untouched for several days. So Dr.
Zimbardo smashed a window with a sledgehammer. “Soon, passersby were
joining in,” wrote Drs. Kelling and Wilson. “Within a few hours, the car
had been turned upside down and utterly destroyed.” What to conclude?

“Disorder
and crime are usually inextricably linked, in a kind of developmental
sequence,” Drs. Kelling and Wilson argued. It had long been known that
if one broken window wasn’t replaced, it wouldn’t be long before all the
other windows were broken too. Why? Because, they wrote, “one
unrepaired broken window is a signal that no one cares, and so breaking
more windows costs nothing.”

The idea that the mere appearance of
disorder encourages a deeper form of disorder cuts against the
conventional wisdom that crime is a function of “root causes.” Yet
municipalities that adopted policing techniques based on the
broken-windows theory—techniques that emphasized policing by foot
patrols and the strict enforcement of laws against petty crimes and
“social incivilities”—tended to register sharp drops in crime and
improvements in the overall quality of life.

We are disposed to
think that, over time, order inevitably dissolves into disorder. But the
drop in crime rates reminds us that we can go the other way—and impose
order on disorder. Could it be that there’s a “broken windows” cure not
just for America’s mean streets but for our increasingly disorderly
world?

President Obama often talks about rules. After Syrian
dictator Bashar al-Assad used sarin gas to murder more than 1,000 people
near Damascus in August 2013, Mr. Obama warned that “if we fail to act,
the Assad regime will see no reason to stop using chemical weapons.”
After Russia seized Crimea in 2014, he denounced the Kremlin for
“challenging truths that only a few weeks ago seemed self-evident, that
in the 21st century, the borders of Europe cannot be redrawn with
force.”

The language is elegant; the words are true. Yet the
warnings rarely amount to much. The U.S. succeeded in getting Mr. Assad
to give up much of his chemical arsenal, but the Syrian dictator goes on
slaughtering his people, sometimes using chlorine gas instead of sarin.
The president’s immediate response to the seizure of Crimea was to
sanction a handful of Russians, send a few fighter jets to Poland and
Lithuania, and refuse Ukrainian requests for military support.

This
is how we arrive at a broken-windows world: Rules are invoked but not
enforced. Principles are idealized but not defended. The moment the
world begins to notice that rules won’t be enforced, the rules will
begin to be flouted. One window breaks, then all the others.

The
most urgent goal of U.S. foreign policy over the next decade should be
to arrest the continued slide into a broken-windows world of
international disorder. The broken-windows theory emphasizes the need to
put cops on the street—creating a sense of presence, enforcing
community norms, serving the interests of responsible local
stakeholders. It stresses the need to deter crime, not react to it, to
keep neighborhoods from becoming places that entice criminal behavior.

A
broken-windows approach to foreign policy would require the U.S. to
increase military spending to upward of 5% of GDP. That is well above
the 3.5% of GDP devoted to defense in 2014, though still under its
45-year average of 5.5%. The larger budget would allow the Navy to build
a fleet that met its long-stated need for 313 ships (it is now below
290, half its Reagan-era size). It would enable the Air Force to replace
an aircraft fleet whose planes are 26 years old on average, the oldest
in its history. It would keep the U.S. Army from returning—as it now
plans to do, over the warnings of officers like Army Chief of Staff Gen.
Raymond Odierno
—to its pre-World War II size.

The key to building a
military ready to enforce a broken-windows policy is to focus on
numbers, not on prohibitively expensive wonder-weapons into which we
pour billions of research dollars—only to discover later that we can
afford just a small number of them.

Broken-windows foreign policy
would sharply punish violations of geopolitical norms, such as the use
of chemical weapons, by swiftly and precisely targeting the perpetrators
of the attacks (assuming those perpetrators can be found). But the
emphasis would be on short, mission-specific, punitive police actions,
not on open-ended occupations with the goal of redeeming broken
societies.

The central tragedy of the Iraq war is that it took
nine months, at a cost of some 480 American lives, to remove
Saddam Hussein
from power and capture him in his spider hole—which ought to have
been the central goal of the war. Yet we spent eight years, and lost an
additional 4,000 Americans, in an attempt to turn Iraq into a model of
Arab democracy—a “root cause” exercise if ever there was one. There’s a
big difference between making an example of a regime like Saddam’s Iraq
and trying to turn Iraq into an exemplary state.

A
broken-windows foreign policy would be global in its approach: no more
“pivots” from this region to that, as if we can predict where the crises
of the future are likely to arise. (Did anyone see Russia’s invasion of
Ukraine coming?) But it would also know how to discriminate between
core interests and allies and peripheral ones.

As Henry Nau of
the George Washington University notes in a perceptive recent essay in
the American Interest, we should “focus on freedom where it counts the
most, namely on the borders of existing free societies.” Those are the
borders that divide the free countries of Asia from China and North
Korea; the free countries of central Europe from Russia; and allies such
as Israel and Jordan from many of their neighbors.

A
broken-windows foreign policy wouldn’t try to run every bad guy out of
town. Nor would it demand that the U.S. put out every geopolitical fire.
American statesmen will have to figure out which of those fires risks
burning down the entire neighborhood, as the war in Syria threatens to
do, and which will probably burn themselves out, as is likely the case
in South Sudan.

Then again, foreign crises rarely present a
binary choice between doing nothing and conducting a full-scale military
intervention. A cruise-missile strike against a single radio tower in
Rwanda during the 1994 genocide could have helped to prevent Hutus from
broadcasting instructions for murdering Tutsis, potentially saving
thousands of innocent lives at minimal cost to the U.S. Bomb strikes by
NATO to lift the siege of Sarajevo helped to turn the tide of the war in
the former Yugoslavia against Serbian dictator
Slobodan Milosevic,
also at no serious cost to the U.S. Perhaps it is time for a
strategy that enshrines the principle that preventing tragedy should enjoy greater moral legitimacy than reacting to it.

In
his famous 1993 essay, “Defining Deviancy Down,” the late
Daniel Patrick Moynihan
observed how Americans had become inured to ever-higher rates of
violent crime by treating as “normal” criminal activity that would have
scandalized past generations of Americans. “We are getting used to a lot
of behavior that is not good for us,” the senator from New York wrote.
Twenty years later, the opposite has happened. We have defined deviancy
up. But having done so, we have tended to forget how much better things
are now than they were before.

Americans have lived in a
relatively orderly world for so long that we have become somewhat
complacent about maintaining it. Perhaps that explains why, in recent
years, we have adopted a foreign policy that neglects to do the things
that have underpinned that orderly world: commitments to global
security, military forces adequate to those commitments, a willingness
to intervene in regional crises to secure allies and to confront or
deter aggressive regimes.

In recent months, however, and
especially since the rise of Islamic State and the beheading of American
journalists Steven Sotloff and
James Foley,
Americans have begun to rediscover certain truths about Pax
Americana: If our red lines are exposed as mere bluffs, more of them
will be crossed. If our commitments to our allies aren’t serious, those
allies might ignore or abandon us. If our threats are empty, our enemies
will be emboldened, and we will have more of them.

In other
words, if the world’s leading liberal-democratic nation doesn’t assume
its role as world policeman, the world’s rogues will try to fill the
breach, often in league with one another. It could be a world very much
like the 1930s, a decade in which economic turmoil, war weariness,
Western self-doubt, American self-involvement and the rise of ambitious
dictatorships combined to produce catastrophe. When President
Franklin Roosevelt
asked
Winston Churchill
what World War II should be called, the British prime minister
replied, “the unnecessary war”—because, Churchill said, “never was a war
more easy to stop than that which has just wrecked what was left of the
world from the previous struggle.” That is an error we should not
repeat.

To say that the U.S. needs to be the world’s policeman
isn’t to say that we need to be its preacher, spreading the gospel of
the American way. Preachers are in the business of changing hearts and
saving souls. Cops merely walk the beat, reassuring the good, deterring
the tempted, punishing the wicked. Not everyone grows up wanting
to be a cop. But who wants to live in a neighborhood, or a world, where
there is no cop? Would you? Should an American president?

America in Retreat: The New Isolationism and the Coming Global Disorder

At a recent event in New York City, Pulitzer Prize winning journalist and Wall Street Journal foreign
affairs columnist and deputy editorial page editor Bret Stephens was
introduced to an audience of hundreds. As he introduced Stephens, the MC
enthusiastically shared that the highlight of his week occurred on
Tuesday mornings when he opened the Journal’s op-ed pages to
read Stephens’ latest column and insights. Similarly, it was with great
anticipation that I opened the pages of Stephens’ new book, America in Retreat: The New Isolationism and the Coming Global Disorder. And as I expected, he did not disappoint. Stephens
is an historian as well as a prolific writer and deep thinker, the
combination of which has led to a thoughtful, well-researched and
factually-supported manuscript. His book is a direct result of years of
failed U.S. foreign policy:

Since
Barack Obama took office in 2009, the political order of the Arab world
has nearly unraveled. The economic order of the European world is under
strain. The countries of the Pacific Rim are threatened by a China that
is by turns assertive, reckless, and insecure. Despite its fundamental
weaknesses, Russia seeks to dominate its “near-abroad” through a
combination of local proxies, dirty tricks, and outright conquest.
Another international order – the nuclear one – is being fundamentally
challenged by the acquisition of nuclear capabilities by two uniquely
dangerous states, Iran and North Korea, which in turn invites their
nearest neighbors to consider their own nuclear options. Al Qaeda may be
diminished in some corners of the Middle East, but it is metastasizing
in others. The United States is more reluctant than it has been for
decades to intervene abroad, judging that there is better security in
inaction than action. Traditional allies of the United States, uncertain
of its purposes, are beginning to explore their options in what they
suspect is becoming a post-Pax Americana world, encouraging freelancing
instincts which Washington has a diminishing ability to restrain.

How
did America, the leader of the free world for a variety of reasons
including its military strength, powerful international alliances, and
unrivaled visionary leadership, come to a place at which scholars,
journalists, enemies, and friends debate whether it is in decline or
temporary retreat? This is a distinction with a difference that Stephens
addresses early in his book as he optimistically concludes that America
is not in decline -- we still have a choice. In making the case that
the dismal state of affairs can be reversed, he also develops a powerful
argument for the next president to be a neocon who recognizes the
imperative role of America as the world’s policeman.

In
examining the “Retreat Doctrine” of “rebalance, resize, and retreat,”
Stephens notes that Obama’s foreign policy approach is not simply a
retreat in military might. It is also “a diplomatic approach, a
strategic posture, perhaps even a national ideal.” He walks the reader
through Obama’s “Light Footprint” approach to foreign policy that rests
upon the belief that “the containment most needed in the twenty-first
century is not of authoritarian adversaries such as China, Russia, or
Iran” but of “the United States itself.”

Stephens
further makes the point that while Obama, when speaking about foreign
policy, tends to do so in moral terms, “so much so that it sounds as if
he’s running not a superpower but a social movement,” what the president
is actually doing is retreating “from ordinary moral judgment.” The
problem with Obama’s Retreat Doctrine in this regard is that he does not
follow through on moral decisions from ignoring human rights violations
in Egypt, Syria, Iran, Russia, and China to ignoring the Green Movement
in Iran in 2009.

Stephens
also calls attention to the isolationists’ mistaken belief that all of
these foreign policy failures are taking place, and will remain, far
from America’s shores. He expounds upon the observation of Leon Trotsky
that “You may not be interested in war, but war is interested in you”
and observes, “[o]ne can only be alone when one is left alone. We will
not be left alone.” However, he also recognizes that “No great power can
treat foreign policy as a spectator sport and hope to remain a great
power.”

For
those concerned with the apparent divide in the Republican Party,
Stephens’ chapter on “Republicans in Retreat” is interesting. He notes
that “Republicans are busy writing their own retreat doctrine in the
name of small government, civil liberties, fiscal restraint, ‘realism,’ a
creeping sense of Obama-induced national decline, and a deep pessimism
about America’s ability to make itself, much less the rest of the world,
better.” He then attacks those claims and points out that American
retreat:

Ultimately
requires a return to the very thing small-government conservatives hate
most: the expensive, intrusive, security-conscious state. It’s also no
accident that democratic countries that do the most to slash their
military budgets and global commitments also have comparatively bigger
welfare states.

After
investigating the foreign policy divide within the conservative
movement and in particular, the influence of the Tea Party and
“Realists” and how they led to isolationist ideals, Stephens concludes
that only conservative foreign policy will achieve the maintenance of
global order.

Stephens’
historical analysis is compelling. “The tragedies of the 1930s are well
known. What’s forgotten is how they flowed from the illusions of the
1920s, the same illusions that conservative advocates of the Retreat
Doctrine harbor today.” Against this backdrop, he debunks the claims of
those who support this doctrine and who believe the world will sort
itself out without American intervention. He exposes the failures of
concepts such as liberal peace, balance of power, and collective
security as alternatives to Pax Americana. “A balance of power may seem
plausible in theory. But the nature of power is that it seeks
pre-eminence, not balance.” Again, it is clear that the only alternative
to Pax Americana is global disorder.

After
recognizing America’s recent weak responses to provocations (N. Korea’s
testing of a ballistic missile and nuclear weapons, Syria’s use of
chemical weapons, Russia’s seizure of Crimea), Stephens proscribes a way
out of this mess. The immediate goal of U.S. foreign policy should be
to arrest the slide, introduce a “broken-windows” approach of deterrence
rather than reaction, put cops on the street by deploying personnel
globally, increase military spending, punish violations of geopolitical
norms, be global in approach, distinguish core interests, and prevent
local conflicts from escalating into regional catastrophes. While this
may seem like a common sense approach, our current policy-makers and
leaders would benefit from a tutorial.

There
is a growing sense that if America provides no leadership,
authoritarian regimes will quickly fill the breach; that if our red
lines are exposed as mere bluffs, more of them will be crossed; that if
our commitments to our allies – both the ones we generally like and the
ones we have no option but to accept – aren’t serious, those friends
might abandon us; that if our threats against our enemies are empty, our
enemies will be emboldened, and we will have more of them. If history
does not end – and it hasn’t – then the United States does not get a
holiday from it.

Through
the use of historical facts and analyses, the inclusion of compelling
statistical realities, and the embrace of practical analogies (“No
police or fire department would wait until a house is consumed in flames
before it started putting it out”), Stephens makes the case that the
coming global disorder is inevitable if the country continues on a path
of retreat. He even includes a chapter entitled, “A Scenario for Global
Disorder” peeking into the looking glass of the adventures in the
Democrats’ wonderland if Hillary were to win in 2016. But he also gives
readers like me, who feared prior to reading his book that America’s
decline was irreversible, a rational basis for hope that our preeminent
place in history and the world can in fact be restored under the right
leadership. It is not too late for America -- especially if everyone
reads America in Retreat.

NATO confirmed on Wednesday that Russian tanks were moving into
rebel-controlled eastern Ukraine. But Russia's aggression under Vladimir
Putin didn't begin in Ukraine and, unless the West stops vacillating,
it won't end there, either.

After the 2003 Rose
Revolution, the nation of Georgia, in the Caucasus, became a staunch
American ally. But in 2008, it was invaded and partially occupied by
Putin's Russia, and in 2012 its pro-Western president, Mikheil
Saakashvili, lost the parliamentary elections. Since then, Georgia
has been governed by a coalition founded by a shadowy billionaire who
made his money in Russia. But recently, the Georgian defense minister
was fired and its foreign minister quit. Both advocated closer ties to
the West. Georgia is drifting into Russia's orbit.

Next to Georgia are Armenia and Azerbaijan. Armenia,
heavily armed by Russia, supports a separatist territory inside
Azerbaijan, which is a major oil producer. As Russia also exports
energy, it has a lot to gain from threatening Azerbaijan. Last week, in a
sequel to major border clashes in August, Azerbaijan's military shot
down an Armenian helicopter. Armenia is not a mere Russian puppet, but
by backing Armenia, Russia perpetuates the conflict and again makes
Russian influence felt in the Caucasus.

If Armenia is a
problem, Iran is a threat. Russia announced a contract last week to
build eight new nuclear reactors in Iran. There is nothing new about
Moscow's nuclear ties to Tehran: Russia completed Iran's nuclear
facility at Bushehr. Supposedly the new
reactors, like Bushehr, will produce only electricity. But the West
can't even monitor Iran's existing nuclear program; with eight new
reactors, monitoring will be far tougher.

The Obama
administration badly wants a nuclear deal with Iran. While Russia is a
party to the negotiations with Iran, its new nuclear contract seems
designed to make the administration's quest for an agreement look
unbearably foolish. Even if the West gets
access to Bushehr, Iran will, thanks to Russia, simply draw new nuclear
cards. And by selling to Iran, Russia wins leverage over the West: By
creating a threat, it can perversely demand that it must be part of the
diplomatic efforts to address that threat.

Nor are the Balkans
free from Russian meddling. In late 2013, Montenegrin newspapers
reported that Montenegro had turned down a Russian request for a naval
base, which Russia apparently wanted because it feared losing its Syrian
port at Tartus. As long as Montenegro
has a hope of joining NATO, it is likely to reject Russian requests.
But Bosnia is more vulnerable, and Russia has close ties to Republika
Srpska, the Serbian part of Bosnia. In March, Milorad Dodik, the Serbian
president, met with the Russian foreign minister. Dodik, the Russians
announced, was in Moscow to receive an award from the "International
Public Fund of Unity of Orthodox People." Translation: The Serbs are
Slavic brothers, and just like the Ukrainian rebels and the occupied
parts of Georgia, they are under Russian protection.

In a recent speech,
Putin defended the pact between Adolf Hitler and Josef Stalin that
divided Poland and launched World War II. That was both a hint that he
is willing to cut a dirty deal with the West and a threat to his
neighbors: cooperate with Russia or, like Poland, be divided.

If the West cannot
give Russia's neighbors a better option, they will have to accept
Putin's terms. Putin has the West pegged: We always condemn Russian
actions, but invariably, we soon decide it's time to talk again. The
West needs to draw a line and stand by it: No more forgive and forget.

Ted R. Bromund is a senior research fellow in The Heritage Foundation's Thatcher Center for Freedom.

Putin’s state visit to Erdogan yesterday in Ankara, a summit meeting
between the world’s two top pseudo-democratic authoritarian regimes, can
determine the direction of history for some decades. If you think I
exaggerate, keep reading. Anyone moderately literate in the world’s
strategic balances knows exactly what I mean. I will add some less
visible but pivotal factors that, in toto, could affect all our lives.
At stake is not merely the future of Syria, ISIS and the like, but the
price of oil, the fate of sanctions, the democracy vs. autocracy
struggle, Nato, EU, Cold War, even Nuclear War. The world is poised so
precariously that, as others have noted, we could be at a pre-WW1 moment
on the verge of Great Power conflict.

Back in mid-October I discussed the likely drop in oil price, now
occupying headlines, to outline how Saudi Arabia meant to use oil power
to push back Moscow for supporting Assad http://www.forbes.com/sites/melikkay...r-is-shifting/
Moscow aimed veiled threats at the Saudis for playing a political game
in collusion with the US. Riyadh knows that Putin’s bluster evaporates
domestically without gas and oil revenues, and externally without
pipeline leverage. In the column I point out how, in fact, Saudi Arabia
intends to push back against the US equally; a very low oil price
endangers the cost-effectiveness of fracking. The Saudis aren’t pleased
with Washington’s increasing alignment with the Shiite Crescent in the
Mideast. Then, in November, I wrote in this space about a telephone
quarrel between Erdogan and Putin. I dwelt on Erdogan’s gas deal with
Turkmenistan and Putin’s narrowing timeline for bullying Ukraine with a
compliant EU – compliant because of EU dependence on Russian gas
supplies http://www.forbes.com/sites/melikkay...nvade-ukraine/.

That’s the background to the Ankara summit meeting. Up to now, Putin was
able to slow down all manner of alternatives to Russian fuel by
lowering prices, intimidating suppliers and users, and condign gestures
of violence. It is all on the verge of busting out of his control.
Gazprom has just announced they’re abandoning a pipeline plan to
circumvent Ukraine. In addition, as the link shows, Erdogan signed a
deal to import and pass on Turkmen gas ultimately to Europe. Plus, a
pipeline via Turkey from Azerbaijan will reach Europe in four years.

Meanwhile, Bloomberg just published a report on the Ankara visit saying
the meeting will result in lots of harmony because Turkey has no
alternate to Russian gas. The report also asserts that Russia serves as
Turkey’s second largest trade partner. http://www.bloomberg.com/news/2014-1...fferences.html
. With all due respect, the truth is much more complicated. Erdogan
understands Moscow’s increasing weakness. Indeed, Erdogan himself
embodies the weakening threat, being the conduit for multiple ways
Europe will get fuel supplies – from Azerbaijan, from Turkmenistan, from
Iraq. On the other hand, like others in the region, he has begun to
detach from the West. He’s actually planning to have Russia build
nuclear power stations in Turkey. The stupidity of this idea has many
layers, not least the dependence on Moscow. Clearly Erdogan wants to
acquire a nuclear guarantee for himself and his regime, not a happy sign
for Turkey’s future democracy.

Meanwhile, Putin has made his moves to pressure Turkey. Not many
people know that Georgia’s current government acceded to Russian demands
to build a strategic road from Russian Daghestan through Georgia to the
Azerbaijan border. This will allow the Kremlin to move assets to seal
off the Azeri border at any time. Meaning, isolating Azerbaijan from
trade with Turkey via Georgia, and with Georgia itself, in effect
sealing off Azerbaijan from the world. You can be sure that Georgia’s
regime will act in solidarity with Moscow. The PM in Tbilisi just said,
in a November 25 interview with the FT, that he opposes Western arms for
Ukraine. This is the same government that has not uttered a word
against Putin or for Ukraine against Putin. Essentially, the Kremlin’s
message to Turkey goes something like this: don’t bank on your
Azerbaijan supplies, neither for yourself nor as a conduit to Europe.
Nor should you have faith in the future autonomy of Azerbaijan to make
choices, and that goes for Turkmenistan too. Do you think that the
US or Nato will come to your side when Russian tanks invade those places
and cut you off from their oil and gas? So far Erdogan has no reason to
doubt Putin’s threat. The last thing Erdogan can handle, with its
southern border aflame, is a military threat reopening on Turkey’s
northern flank.

So that’s how the forces are balanced at the summit. Putin will keep
raising the threshold of his threats – many think he will actually use
nuclear weapons, even if through deniable proxies, even if only tactical
weapons. After Assad’s chemical weapons, and pro-Russian rebels downing
a civilian airliner – without consequences – can we dismiss the notion?
For sure, Erdogan can’t. Having alienated Nato and emasculated his
army, he knows nobody will fight a world war to defend him. As for the
US and EU, they have a lot to answer for by ignoring Putin’s aggression
in Georgia and then in Ukraine. They emboldened him to believe that no
single country’s fate will spur them to face him down. They’ve dropped
all red lines so at no juncture were his atrocities pivotal. He has
built up his threat incrementally, stealthily. He has made his message
clear. He doesn’t think he needs to up the ante anymore but he will if
necessary – it might even lead to a world war, if necessary. That’s the
message. With the drop in oil prices, he may have to and the West will
have to respond.

Now, as the 25th anniversary of the fall of the Berlin Wall is commemorated Sunday, Hungary
is a member of NATO and the European Union and Mr. Orban is in his
third term as prime minister. But what was once a journey that might
have embodied the triumph of democratic capitalism has evolved into a
much more complex tale of a country and a leader who in the time since
have come to question Western values, foment nationalism and look more
openly at Russia as a model.

After
leading his right-wing party to a series of national and local election
victories, Mr. Orban is rapidly centralizing power, raising a crop of
crony oligarchs, cracking down on dissent, expanding ties with Moscow
and generally drawing uneasy comparisons from Western leaders and
internal opponents to President Vladimir V. Putin of Russia.

“He is the only Putinist governing in the European Union,” said Joschka Fischer, the former German foreign minister. Some
other Eastern European countries, especially Poland, have remained
oriented toward the West and still harbor deep suspicions of Russia long
after the Cold War ended.

But
Hungary is one of several countries in the former Soviet sphere that
are now torn between the Western ways that appeared ascendant
immediately after the fall of the Soviet Union and the resilient clout
of today’s Russia. Money, culture and energy resources still bind most
regional countries to Russia as tightly as to Europe. Mr. Putin’s
combative nationalism is more popular here than what many see as Western
democratic sclerosis.

Mr.
Orban has laid out a philosophical vision and justification for his
authoritarian-leaning approach that suggests a long-term commitment to
turning Hungary into something quite different from what the West
anticipated when the Iron Curtain collapsed and the Berlin Wall came
down. In
a speech this summer, Mr. Orban declared liberal democracy to be in
decline and praised authoritarian “illiberal democracies” in Turkey,
China, Singapore and Russia.

He
traced his views to what he portrayed as the failures of Western
governments to anticipate and deal adequately with the financial crisis
that started in 2008 and the ensuing deep recession. He called that
period the fourth great shock of the past century — the others being
World War I, World War II
and the end of the Cold War — and the impetus for what he called
today’s key struggle: “a race to invent a state that is most capable of
making a nation successful.”

Western
democracies “will probably be incapable of maintaining their global
competitiveness in the upcoming decades and will instead be scaled down
unless they are capable of changing themselves significantly,” Mr. Orban
said in the speech, according to an English translation on the government’s website.

Hungary,
he said, will be “breaking with the dogmas and ideologies that have
been adopted by the West” and will instead build a “new Hungarian state”
that will be “competitive in the great global race for decades to
come.”

Achieving
that vision will require tougher stances toward outside forces,
including nongovernmental organizations, the European Union and foreign
lenders and investors, he said. As
recently as 2008, Mr. Orban was a fierce critic of Mr. Putin. But the
tone has changed, and the two have grown friendly, with Russia investing
heavily in Hungary.

“Orban
is a populist who acts, doesn’t just talk,” said Peter Kreko, director
of the Political Capital Institute in Budapest, an independent research
organization. As a result, he added, Hungary “can serve as a role model
in Eastern Europe,” enticing countries like Romania and Bulgaria to
follow an authoritarian path.

The
only difference between Mr. Orban and authoritarians in other
countries, Mr. Kreko said, is that “when they turn to the West, they try
to smile, and Orban doesn’t even try.”

The
grand center of Budapest, with its floodlit palaces flickering in the
Danube, its sophisticated cafes, crowded theaters and the tourist-choked
streets, betrays little sense of authoritarian unease. Yet behind the
designer boutiques, young and struggling artists worry about when their
state financing might be cut off if they fail to hit the proper note,
and government watchdog groups suffer attacks in the state-controlled
media while waiting anxiously for the arrival of investigators.

In
the west of Hungary, German auto plants and other foreign investments
create the semblance of a Western European lifestyle. But the feeling is
quite different in the rural east, where destitute families, many of
them Roma, either toil in one of Mr. Orban’s public works projects or
languish in hopes the economy will improve.

Even
the iconography of Budapest has taken on Mr. Orban’s stamp, exemplified
by a much-derided statue unveiled last summer near Parliament showing a German eagle attacking an angel,
meant to represent the Hungarian people — widely seen as an attempt by
Hungarian nationalists to whitewash the country’s alliance with the
Nazis during World War II. Mr. Orban’s subordinates in the ruling party, Fidesz, which he firmly controls,
say that he is unchanged from the anti-communist rabble-rouser of the
past and that charges of incipient dictatorship are left-wing fantasies.

“He
is the same guy he used to be 25 years ago,” said Zoltan Kovacs, the
prime minister’s international spokesman. “He wants to get rid of the
attitudes, the remnants of the former system — get rid of the attitude
that people live on social aid rather than work.”

Even
his harshest critics concede that Mr. Orban has gone to nowhere near
the lengths of Mr. Putin in silencing opponents. No one has been tossed
in prison for criticizing the government. There has been no overt
censorship. Recent mass protests against a proposed Internet tax were allowed to proceed and ended up forcing a retreat by Mr. Orban.

Nonetheless,
foreign criticism is mounting. When President Obama recently listed
states that are silencing civil society groups, Hungary was the only
European country named. Washington has barred six unidentified public
officials, deeming them too corrupt to enter the United States.

After
the first free elections in 1990, Mr. Orban was one of several figures
who had helped topple communism to jostle for power and influence. Most
Hungarians, like others in Central and Eastern Europe, had unrealistic
expectations of a quick, good life under democracy and capitalism.

They
embraced NATO membership, which in 1999 came with the immediate duty to
oppose Russia and fight in the war over Kosovo. They chafed at long
negotiations, but like seven other former Soviet bloc nations welcomed
European Union membership in 2004.

Hungarians
perhaps felt the hardship of transition more bitterly than most because
they had lived better than many others in the Soviet bloc under
communism. Hungary
had “goulash communism,” said Balint Ablonczy, domestic political
editor of the pro-government journal Heti Valasz. Liberal democracy
brought freedom of speech, but also the loss of jobs and of a sense of
security, he said. In 1998, voters threw out the Socialist government and handed power to Mr. Orban and his party.

But
as prime minister in that first term, “he overdid the nationalist
ideology,” said Julia Lakatos, an analyst at the Center for Fair
Political Analysis, a research group in Budapest. In 2002, the
Socialists won back power. In 2010, though, voters turned back to Mr.
Orban, who appeared to have learned from his previous mistakes.

Critics
contend that the government uses its purse strings to control the arts
and make the news media compliant. Dissent is attacked in the official
press and sometimes investigated by the government. Even
some conservative supporters are slightly wary of the extent to which
Mr. Orban has systematically assembled power: packing courts and the
chief prosecutor’s office with loyalists, altering the Constitution and
laws so his party dominates.

“He
ran as someone who would bring the two sides together in Hungarian
politics, but when he got in he said, no, it is the time of the right,
the time for revenge on the left,” said Mr. Ablonczy, the editor. “For
him, politics is fighting. I am a man of the right, but my deepest
disappointment with this government is this logic of always fighting.”

Fidesz
won a second consecutive four-year term in April, its coalition again
eking out a two-thirds majority in Parliament that essentially allows it
to pass whatever laws it pleases. The party also won the European
Parliament elections in May and local elections Oct. 12, a rare triple
in fractious Europe these days.

Signs abound of the distance Hungary has traveled since communism’s fall. Laszlo
Magas helped organize a Pan-European picnic in Sopron on the Austrian
border that, in 1989, provided a first death knell for the Berlin Wall.
Hundreds of East Germans used the occasion to pour across the
once-sealed frontier.

Now
a Fidesz member of the Sopron City Council, Mr. Magas refused to
discuss politics at all, he says, because foreigners do not understand
the country. Western news media, he says, seek out only opponents of Mr.
Orban, who are a tiny minority in today’s Hungary.

They
embraced NATO membership, which in 1999 came with the immediate duty to
oppose Russia and fight in the war over Kosovo. They chafed at long
negotiations, but like seven other former Soviet bloc nations welcomed
European Union membership in 2004. Hungarians
perhaps felt the hardship of transition more bitterly than most because
they had lived better than many others in the Soviet bloc under
communism.

Hungary
had “goulash communism,” said Balint Ablonczy, domestic political
editor of the pro-government journal Heti Valasz. Liberal democracy
brought freedom of speech, but also the loss of jobs and of a sense of
security, he said. In 1998, voters threw out the Socialist government and handed power to Mr. Orban and his party. But
as prime minister in that first term, “he overdid the nationalist
ideology,” said Julia Lakatos, an analyst at the Center for Fair
Political Analysis, a research group in Budapest. In 2002, the
Socialists won back power.

In 2010, though, voters turned back to Mr. Orban, who appeared to have learned from his previous mistakes. Critics
contend that the government uses its purse strings to control the arts
and make the news media compliant. Dissent is attacked in the official
press and sometimes investigated by the government.

Even
some conservative supporters are slightly wary of the extent to which
Mr. Orban has systematically assembled power: packing courts and the
chief prosecutor’s office with loyalists, altering the Constitution and
laws so his party dominates.

“He
ran as someone who would bring the two sides together in Hungarian
politics, but when he got in he said, no, it is the time of the right,
the time for revenge on the left,” said Mr. Ablonczy, the editor. “For
him, politics is fighting. I am a man of the right, but my deepest
disappointment with this government is this logic of always fighting.”

Fidesz
won a second consecutive four-year term in April, its coalition again
eking out a two-thirds majority in Parliament that essentially allows it
to pass whatever laws it pleases. The party also won the European
Parliament elections in May and local elections Oct. 12, a rare triple
in fractious Europe these days.

Signs abound of the distance Hungary has traveled since communism’s fall.

Laszlo
Magas helped organize a Pan-European picnic in Sopron on the Austrian
border that, in 1989, provided a first death knell for the Berlin Wall.
Hundreds of East Germans used the occasion to pour across the
once-sealed frontier. Now
a Fidesz member of the Sopron City Council, Mr. Magas refused to
discuss politics at all, he says, because foreigners do not understand
the country. Western news media, he says, seek out only opponents of Mr.
Orban, who are a tiny minority in today’s Hungary.

The bullying of Hungary – the country that dared to disobey the US and EU

25 years ago, Hungary was being toasted in the West for opening its
border with Austria to East Germans, in a move which led to the fall of
the Berlin Wall. Now the Western elites are not happy with Budapest
which they consider far too independent.

The refusal of Prime Minister Viktor Orban and his ruling Fidesz
party to join the new US and EU Cold War against Russia, which
has seen the Hungarian parliament approving a law to build the
South Stream gas pipeline without the approval of the European
Union, in addition to the populist economic policies Fidesz has
adopted against the largely foreign owned banks and energy
companies, has been met with an angry response from Washington
and Brussels.

Hungarian officials have been banned from entering the US, while
the European Commission has demanded that the Hungarians explain
their decision to go ahead with South Stream. That’s on top of
the European Commission launching legal action against the
Hungarian government for its law restricting the rights of
foreigners to buy agricultural land. The bullying of Hungary hasn’t made many headlines because it’s
so-called “democrats” from the West who have been doing
the bullying.

Viktor Orban is not a communist, he is a nationally-minded
conservative who was an anti-communist activist in the late
1980s, but the attacks on him and his government demonstrate that
it doesn’t matter what label you go under - if you don’t do
exactly what Uncle Sam and the Euro-elite tell you to do - your
country will come under great pressure to conform. And all of
course in the name of “freedom” and
“democracy.”

Fidesz has been upsetting some powerful people in the West ever
since returning to power in 2010. The previous
“Socialist”-led administration was hugely popular in the
West because it did everything Washington and Brussels and the
international banking set wanted. It imposed austerity on
ordinary people, it privatized large sections of the economy, and
it took out an unnecessary IMF loan. Ironically, the
conservative-minded Fidesz party has proved to be much better
socialists in power than the big-business and banker friendly
“Socialists” they replaced.

One of the first things that Fidesz and its coalition allies, the
Christian Democratic People’s Party, (KDNP) did was to introduce
an $855m bank tax - the highest such tax in Europe - a measure
which had the financial elite foaming at the mouth. Orban clashed with the IMF too, with his government rejecting new
loan terms in 2012, and paying off early a loan taken out by the
previous government, to reduce interest payments.

In 2013, Orban took on the foreign-owned energy giants with his
government imposing cuts of over 20% on bills. Neoliberals
expressed their outrage at such “interventionist”
policies, but under Orban, the economy has improved. Although
it’s true that many still look back nostalgically to the days of
“goulash communism” in the 1970s and 80s when there were
jobs for all and food on the table for everyone. Unemployment
fell to 7.4 percent in the third-quarter of this year; it was
around 11 percent when Fidesz took power, while real wages rose
by 2.9 percent in the year up to July.

The man his enemies called the “Viktator,” has shown
that he will pursue whatever economic policies he believes are in
his country’s national interest, regardless of the opinions of
the western elite who want the Hungarian economy to be geared to
their needs.

His refusal to scrap his country’s bank tax is one example; the
closer commercial links with Russia are another. Russia is
Hungary’s third biggest trading partner and ties between the two
countries have strengthened in the last couple of years, to the
consternation of western Russophobes. In April, a deal was struck
for Moscow to loan Hungary €10 billion to help upgrade its
nuclear plant at Paks.

Orban’s policy of improving trade and business links with Russia,
while staying a member of the EU and NATO, has however been put
under increasing strain by the new hostile policy towards Moscow
from Washington and Brussels.

Orban again, has annoyed the West by sticking up for Hungary’s
own interests. In May he faced attack when he had the temerity to
speak up for the rights of the 200,000 strong Hungarian community
living in Ukraine.”Ukraine can neither be stable, nor
democratic, if it does not give its minorities, including
Hungarians, their due. That is dual citizenship, collective
rights and autonomy.” Hungary’s Ambassador was summoned to
the Foreign Ministry in Kiev. Donald Tusk, Prime Minister of
Poland, the US’s most obedient lapdog in Eastern Europe, called
Orban’s comments “unfortunate and disturbing” as if it
was anything to do with him or his country.

In August, Orban accurately described the sanctions policy of the West
towards Russia as like “shooting oneself in the
foot.”“The EU should not only compensate producers
somehow, be they Polish, Slovak, Hungarian or Greek, who now have
to suffer losses, but the entire sanctions policy should be
reconsidered,” Orban said.

In October, Hungarian Foreign Minister Peter Szijjarto also
questioned the sanctions on Russia, revealing that his country is
losing 50 million forints a day due to the policy. Hungary has made its position clear, but for daring to question
EU and US policy, and for its rapprochement with Moscow, the
country has been punished.

It’s democratically elected civilian government which enjoys high
levels of public support, has ludicrously - and obscenely - been
likened to military governments which have massacred their
opponents. "From Hungary to Egypt, endless regulations and
overt intimidation increasingly target civil society,"
declared US President Barack Obama in September. Last month there was another salvo fired at Hungary - it was
announced that the US had banned six unnamed Hungarian government
officials from entering America, citing concerns over corruption-
without the US providing any proof of the corruption.

"At a certain point, the situation, if it continues this way,
will deteriorate to the extent where it is impossible to work
together as an ally," warned the Charge D’Affaires of the US
Embassy in Budapest, Andre Goodfriend. The decision and the
failure to provide any evidence, understandably caused outrage in
Hungary. “The government of Hungary is somewhat baffled at
the events that have unfolded because this is not the way friends
deal with issues," said Janos Lazar, Orban‘s chief of staff.

The timing of the ban has to be noted, coming after the Hungarian
government had criticized the sanctions on Russia and just before
the national Parliament was due to vote on the South Stream
pipeline. The pipeline, which would allow gas to be transported
from Russia via the Black Sea and the Balkans to south and
central Europe without passing through Ukraine, is a project
which Russophobes in the West want cancelled.

"I am inclined to think that it is a punishment for the fact
that we talk to Russia," said Gabor Stier, the head foreign
policy editor of the leading Hungarian newspaper Magyar Nemzet. "America thinks that we are corrupt, but we are a sovereign
state, and it is our business. Many people in the United States
do not like that Viktor Orban is very independent…..Corruption is
just an excuse."

It’s hard to disagree with Stier’s conclusions. Of course, there is corruption
in Hungary, as there is in every country, but it pales in
comparison with some countries who are faithful US allies and who
Washington never criticizes. The 2013 Corruption Perceptions
Index compiled by Transparency International,
reveals that Latvia, the Czech Republic, Croatia, Romania,
Bulgaria and Bosnia-Herzegovina are all below Hungary, as indeed
is Italy. Yet it’s Hungarian officials that the US is banning.

True to form, the attacks on Orban and his government in the
Western media have chimed with the political attacks. ‘Is
Hungary, the EU’s only dictatorship?’ asked Bloomberg View
in April. The BBC ran a hostile piece on Orban and Fidesz in
October entitled Cracks Emerge in leading party, and which
referred to “government corruption” and “the playboy
lifestyle of numerous party officials.”

The piece looked forward to the end of Fidesz rule. While earlier this week, the New York Times published an OpEd by
Kati Marton, whose late husband Richard Holbrooke, was a leading
US diplomat, entitled Hungary’s Authoritarian Descent. You’d
never guess that the Hungarian government wasn’t the flavor of
the month in the West would you? The question which has to be asked is: will Hungary be the next
country to be the target of a US/EU sponsored regime change? We all know what happened to the last Viktor who refused to sever
links with Russia. Will Orban suffer the same fate as Ukraine’s
Yanukovich? There are good reasons for believing that he won’t.

Fidesz did make a mistake by announcing the introduction of a new
internet tax last month, which brought thousands onto the streets
to protest but they have since dropped the plans and the problem
for the US and EU is that Orban and his government remain too
popular. In October’s local elections Fidesz won 19 of Hungary’s
21 larger towns and cities, including the capital city Budapest,
not bad for a party that‘s been in power since May 2010.

Orban’s brand of economic populism, combined with moderate
nationalism, goes down well in a country where people remember
just how awful things were when the neoliberal
“Socialists” were in power. His style of leadership may
be authoritarian, but Hungarians prefer having a leader who has
cut fuel bills and reduced unemployment to one who mouths
platitudes about “liberal democracy” but who imposed
harsh austerity measures and leaves them unable to afford the
daily essentials.

Moreover Hungary, is already a member of the EU and NATO unlike
Ukraine under Yanukovich and isn't about to leave either soon. On
a recent visit to America Foreign Minister Peter Szijjarto told
the US TODAY newspaper “US is our friend, US is our closest
ally.” The US clearly wants more from Hungary than just
words, but while both Washington and Brussels would like to see a
more obedient government in Budapest, the “liberal” and
faux-left parties they support simply don't have enough popular
support for the reasons outlined above. And things would be even
worse for the West if the radical nationalist party Jobbik, the
third largest party in Parliament, and which made gains in
October’s local elections, came to power- or if there was a
genuine socialist/communist revival in the country. The fact is
that Orban is in a very strong position and he knows it. That’s
why he feels able to face down the threats from abroad and
maintain a level of independence even though total independence
is impossible within the EU and NATO.

We can expect the attacks on Orban and his government to
intensify but the more the West attacks, the more popular Orban,
who is able to present himself as the defender of Hungary’s
national interests, becomes. Hungary gave the West everything it wanted in 1989, and, as I
pointed out here, its “reform” communist
leadership was richly rewarded. But in 2014 it’s a very different
story. In the interests of democracy and small countries standing
up to bullying by powerful elites, long may Hungary’s spirited
defiance continue.

President Zeman calls for lifting of Russia sanctions at event organized by Putin associate

The Czech president addressed the Dialogue of
Civilizations conference on the Greek island of Rhodes in fluent
Russian. The annual event is organized by a Vienna-based group called
World Public Forum. Its president is the Russian oligarch Vladimir
Yakunin, who has himself been targeted by US sanctions. In
his 17-minute address on Friday, Mr Zeman criticized the sanctions
imposed by the EU and US on Russian over Moscow’s support for
pro-Russian rebels in Ukraine and its annexation of Crimea.

"We
have to remove the sanctions which are not only useless but they cause a
reverse effect than their authors hoped to achieve. We need to develop a
dialogue based on the exchange of people, commodities and capital as
well as completely uncensored information,” Mr Zeman said.

Much of the president’s remarks dealt with the threat of the terrorist
group Islamic State, which Mr Zeman said was a cancer compared to the
“civil war” in Ukraine. The West and Russia must join forces in fighting
Islamic terrorism, he said. Indeed, Mr Zeman warned, Ukraine could in
the future become a terrorist haven just like Libya and Iraq. The president’s remarks contradict past declarations by the Czech
foreign minister, Lubomír Zaorálek, who last month denounced the
incursion of Russian armed forces into Ukraine. But Czech
Prime Minister Bohuslav Sobotka has also questioned the effectivity of
the sanctions, and asked for concessions to protect the Czech industry.
David Frous is a spokesman for the Czech Foreign Ministry.

"I
don’t think they were necessarily in conflict with what Czech
Republic’s view. We have repeatedly emphasized that not all the
sanctions applied have the expected impact on the Russian economy, and
in consequence on the Russian behaviour towards Ukraine.”

However, the president Mr Zeman has come under fire in the Czech media
both for the content and the form of his Rhodes address. Some
commentators criticized his very participation in the event which he
first attended in 2005 but this arrived for the first time as the
president of his country. Commentator Jefim Fištejn says the
Czech Republic, Slovakia and Hungary have become the most vocal
opponents of the EU’s stance on Russia which could have serious
consequences for the countries’ future.

“We are part
of the western of the Western civilization with all its achievements and
values. Trying to be in between, trying to be in between the different
worlds is dangerous for such a country whose geopolitical position is
very delicate. Any unclear and dubious statements weaken the country’s
geopolitical roots.”

The Czech public seems to be split
on the issue of Russian policies in Ukraine and the EU’s reaction to
it. In the latest survey, one third of the respondents opposed the
sanctions while 48 percent supported them. Some 10,000 people have
meanwhile signed petitions calling for a tougher stance on Russia.

The country next in line to join the European Union staged a
spectacle not seen in a generation Thursday to honour Russian President
Vladimir Putin. Serbia held its first military parade since the days of former
President Josip Broz Tito as part of the celebrations during the Russian
leader's six-hour visit Thursday. The festivities commemorated the
Soviet Union's role in liberating the country from Nazi occupation in
World War II, according to the government in Belgrade.

Serbian Prime Minister Aleksandar Vucic, an ally of strongman
Slobodan Milosevic during Yugoslavia's bloody breakup, is balancing the
nation's EU aspirations with traditional Russian ties. Putin's visit
gives him an opportunity to show the 28-nation bloc that he has other
foreign-policy options if membership criteria become unpalatable,
according to Djordje Vukadinovic, an analyst at the Belgrade-based New
Serbian Political Thought institute.

"Vucic is honoring Putin with the military parade to consolidate his
own standing within his electorate," Vukadinovic said. "At the same
time, he's sending a message to the EU that he actually has an
alternative if they press him too hard on democracy, human rights or
media freedoms."

The European Commission, the EU's executive, last week called on
Serbia to improve democracy, the rule of law, media freedoms, the
economy and ties with Kosovo. Serbia has yet to open any of the 35
policy-reform areas needed to join the EU after starting the process in
January. As the talks drag on, with former Yugoslav partners Slovenia and
Croatia already in the trading bloc, public support for membership fell
to 46 per cent in June from 51 per cent six months earlier, according to
a survey of 1,015 people.

The split is between proponents of closer ties with the EU, Serbia's
largest trading partner, and Russia, which supplies the country's energy
and supports its rejection of international recognition for Kosovo's
independence. Vucic withstood calls to join sanctions against Russia
over Ukraine. The Belgrade parade, the first since the collapse of Yugoslavia,
included tanks and other military vehicles and a fly-over of fighter
jets.

"We have left wars behind," President Tomislav Nikolic said before
the parade started. "Today, Serbia bases its growth on free access to
the Russian market and investments from Russia." Nikolic awarded "dear brother Vladimir" the highest Serbian
decoration, the Order of the Republic. Putin was greeted in Belgrade by
cheering crowds, standing in the rain, with one of the banners saying:
"Vladimir, Save Us."

Soviet
troops helped guerrillas led by Tito oust German troops in
1944 and establish the communist regime. Tito later opposed Joseph
Stalin's plan to make Yugoslavia a Soviet satellite, resulting in the
country's expulsion from the Communist Information Bureau in 1948. The
rupture oriented Yugoslavia westward even before the fall of
communism. The EU today accounts for 64 per cent of Serbia's foreign
trade and 72 per cent of investment, according to Serbia's statistics
office and central bank. Russian investment was 598 million euros
between 2005 and 2013, compared with total investments of 13.3 billion
euros.

Russia may consider allowing a quota of cars made by Italian
manufacturer Fiat SpA in Serbia to be exported to Russia, Putin said in
Belgrade. He also sees a chance for Serbian farm exports to triple to
390 million euros if various agreements have been implemented. Russia
has banned imports of European foodstuffs and Serbia has promised Russia
it won't allow EU countries to use its territory to export food.

Western sanctions "provide opportunities" for countries that "want to
cooperate with Russia," Putin said in Belgrade. "If there's no luck,
then misfortune can help."

Serbia's further EU integration is years away, even after Vucic and
Nikolic vowed to press for membership in 2019. EU Enlargement
Commissioner Johannes Hahn said on 30 September new members won't be
accepted before the turn of the decade. That gave Putin an opening amid Russia's worst standoff with the EU,
the United States and their allies since the end of the Cold War,
according to Dimitar Bechev, a senior policy fellow at the European
Council on Foreign Relations.

Vucic's six-month-old administration is trying to jump-start economic
growth and create jobs as the economy faces its third recession since
2009. His policies are designed to quell growing public discontent, with
sporadic protests by industrial workers, teachers and police over
planned public wage cuts. Students, who demonstrated this week in
Belgrade, are being forced to pay more for their studies as state
universities increase fees.

The premier is trying to "improve his image among his own supporters,
who have totally different views" on issues including public wage and
pension cuts or the Gay Pride parade organised last month, said
Vukadinovic at the Serbian Political Thought. Demonstrating a closeness
with Putin may win back some of that support, he said.

"For Serbian citizens, the love for Russia is purely emotional and
irrational" and political leaders "have been encouraging the emotional
bond with Russia," Svetlana Logar, a sociologist and researcher at the
Belgrade-based pollster Ipsos Strategic Marketing, said in an interview.
"But when you ask them about a country they'd like to move to, it's
Germany."

Vladimir Putin moves to strengthen ties with Serbia at military parade

Vladimir Putin set the seal on Russia’s closest alliance in central
Europe on Thursday exchanging vows of support with Serbia and attending a
military parade in Belgrade on a scale that has not been seen in the
region since the Cold War.

The Russian president vowed never to recognise Kosovo’s independence,
a priority for Serbia which refuses to accept the loss of the former
province after a war in the late 1990s. In return, his Serbian
counterpart, Tomislav Nikolić, pledged not to bow to European Union
pressure to take part in sanctions against Russia, over Moscow’s role in
the Ukraine conflict.

“Europe can count on it that we will not impose sanctions and that’s
that,” Nikolic said at the Palace of Serbia, a huge socialist-era
building on the banks of the River Sava. “Serbia will not endanger its
morality by any hostility towards Russia.”

The reaffirmation of Russian-Serbian ties, at an event to celebrate
the alliance in two world wars, was a boost for Putin on his way to the
ASEM summit of European and Asian leaders in Milan, where he can expect a
frosty reception from western and Ukrainian leaders. The Australian
foreign minister, Julie Bishop, said she would raise the downing of
Malaysian Airlines flight MH17, allegedly by Russian separatists in
Ukraine, in which 298 people were killed, including 38 Australian
citizens and residents.

After arriving in Milan from Belgrade, Putin was due to meet the
German chancellor, Angela Merkel, who said she would press him on
observance of a September ceasefire agreement which remains tenuous.

“It is above all Russia’s task to say clearly that the Minsk plan is
really respected,” Merkel said as she arrived for the summit.
“Unfortunately, there are still very, very big shortcomings. But it is
important to seek dialogue here.”

On Friday, Putin will meet his Ukrainian counterpart, Petro
Poroshenko to attempt to strengthen the truce and also come to a deal
over Russian gas supplies to Ukraine. Much of the Russian gas supplied to the EU passes through pipelines
crossing Ukraine, and Putin warned that Russia would cut supplies
intended for Europe if Ukraine siphons off gas intended for Europe, as
it did in 2008. “Russia always has been a reliable supplier. But there
are big transit risks,” he said in Belgrade.

Putin enjoyed a brief respite from those pressures while in the
Serbian capital for a military march-past commemorating the centenary of
the first world war and the 70th year since the Soviet army and
Yugoslav partisans liberated Belgrade. An enthusiastic crowd, estimated
by the Serbian government as 100,000-strong, lined the parade route and
chanted “Putin, Putin”, and “Serbia-Russia, we don’t need the [European]
Union”.

Nikolic awarded him a large medal and chain of precious metals, named
the Order of the Republic of Serbia, the country’s new highest honour,
having been specially created for the occasion.

The march-past involved 300 military vehicles, including scores of
tanks, as well as anti-aircraft missiles on trailers, and over 3000
troops marching in high-stepping unison under a sudden torrential
downpour. At the same time, Serbian and Russian jet fighters roared
overhead and paratroopers dropped from the sky. It was the biggest
military parade in Serbia and the Balkan region since 1985, when it was
the Yugoslav army marching past the country’s communist leaders.

Big screens over the crowd showed footage of the country military’s
past, including the recapture of Belgrade, with Red Army help, from the
Nazis in October 1944. The screens also showed military parades of the
socialist era watched by the white-gloved, blue-uniformed Yugoslav
dictator Tito.

What was missing from the visual history was Serbia’s role in the
Croatian, Bosnian and Kosovo wars of the 1990s, all of which the country
lost under Tito’s successor, Slobodan Milosevic. However, there were
reminders that the territorial and ethnic issues fuelling those wars
have not been resolved. The Russian and Serbian leaders made Kosovo a
constant theme, and the Serb separatist leader in Bosnia, Milorad Dodik,
fresh from a narrow election win, was given pride of place in the front
row of the viewing platform, close to Putin. It was a clear show of
support for Dodik who has vowed to weaken the Bosnian state and lead the
country’s Serbs to independence.

Serbia is not planning to impose sanctions on Russia, said its
President Tomislav Nikolic after meeting EU Commissioner Johannes Hahn.
The latter said the EU expects Serbia to bring its policy in line with
the European one if it seeks to enter the union. Nikolic said that Serbia is not planning to introduce sanctions
at the moment, though admitting the country is seeking EU
membership which implies an obligation to pursue common policies,
including foreign.

"What I heard from Hahn is the same what you have heard from
him: Serbia is not an EU member and it can be independent in
pursuing its foreign policy; but EU membership would have implied
a commitment to pursue a common foreign policy," the
President said at a media conference after talks with Hahn, EU
Commissioner for Enlargement and Good-Neighbourly Relations
visiting Belgrade on Thursday.

In turn Hahn emphasized the importance of a common policy in the
EU and Serbia’s commitment to it if the country wants to join the
union. But he admitted that currently Serbia is not a member and
“will definitely not impose sanctions on Russia."

Later in an interview with the local newspaper Vecernje Novosti,
Hahn used harsher rhetoric saying Serbia is legally bound to
harmonize its policies with Europe on such issues. He elaborated that he understands the historic connection between
the two countries and accepts the fact this decision will not be
easy.

“Your country identified EU accession as its key strategic
objective, which Prime Minister [Aleksandar] Vucic confirmed
during the recent visit of [Russian] President Putin to
Serbia," he said. "It is very important and we expect of
Belgrade to meet its commitment," he added.

Earlier on Thursday, Serbian Prime Minister Aleksandar Vucic also
said that though the EU is Serbia’s “strategic goal” the
country won’t impose sanctions over Ukraine in line with the
Union.

"I am going to tell you what I keep saying to everybody
wherever I go: Moscow, Washington, Brussels, Belgrade or Kosovska
Mitrovica. Everything I have said about Serbia's policy, our path
to the EU and our attitude to Russia, I have also said to
[Russian President] Vladimir Putin and Mr. Hahn," Vucic
stressed meeting Hahn.

Moscow and Beijing criticize EU’s push

On Thursday, the EU pressure was criticized by Russian MP Aleksey
Pushkov, who said that the EU is trying to force Serbia into the
Russia sanctions club.

“Presently the European Union is trying to force Serbia,
which is not an EU member, to join their sanctions program. They
are practically blackmailing Serbia: either it joins the
sanctions against Russia or [the bloc] won’t see it as a country
with a chance of joining the EU,” the head of Russia’s State
Duma Foreign Affairs Committee said. “The problem for Serbia is that in any case it has no
prospects for joining the EU anytime soon. Even if they join the
anti-Russian sanctions now, they would simply succumb to
blackmailers and no one would accept them in the EU in one year
for doing this,” he added.

China has also replied to Hahn’s statement in tune with Russia
saying that EU is trying to impose its values on Serbia.

"As I know the accession to the European Union is the
priority task for Serbia. By taking this opportunity the EU is
trying to impose its values on Serbia and sets the imposition of
sanctions on Russia as a condition for entering the Union,"
Vice-Minister of the International Department of the Chinese
Communist Party Central Committee Zhou Li said on Thursday as
quoted by TASS.

China "considers any sanctions counter-productive in
international relations", Zhou Li said. "In essence this
problem is the choice that the Serbian government, the ruling
party and the opposition face."

Camouflage-clad Russian soldiers
parachute from the sky, armored vehicles fire live rounds on an open
field after being dropped from military transport jets and helicopters
fire missiles against enemy positions. Although the
flat terrain resembles the Ukrainian war zones, this is not an armed
Russian intervention against its neighbor. It's the first-ever joint
Serb-Russian military exercise in Serbia, the Balkan country that has
been performing a delicate balancing act in between its Slavic ally
Russia and Western Europe, with which Belgrade wants to integrate.

The
"anti-terrorist' drill on Friday — the first such by the Russians
outside the former Soviet Union — of elite Russian troops in northern
Serbia, not far from NATO-member Croatia, has stirred controversy both
here and abroad.

"Serbia's
government wants to try and keep everyone happy," said prominent Balkan
political analyst Tim Judah. "So, the U.S. helps finance and modernize
Serbia's army while now Serbian soldiers train with Russians. In normal
times there would be little to say about this, but post-Crimea, these
are not normal times anymore."

Although
Serbian officials say they respect Ukraine's territorial integrity and
do not support Russia's annexation of Crimea, they have refused to
impose sanctions against Russia like the EU and the U.S. have. Russia
and Serbia have traditionally close historic and cultural ties, and
Moscow has backed Belgrade's bid to maintain its claim over Kosovo — a
former Serbian province that declared independence in 2008 with the
support of Washington and its allies.

The
show of Russian military might in a country seeking to join the
European Union comes as Russia, blamed by the West for fomenting the
Ukraine crisis, tries to increase the Kremlin's presence in the Balkans. During our short stay in
Serbia, we established the basis for expanding of our military
relations," said Russian Gen. Vladimir Shamatov.

Russian
President Vladimir Putin was in Belgrade last month where he received a
hero's welcome that included a Soviet-style military parade. The head
of the Russian Orthodox Church, Patriarch Kirill, arrived in Belgrade on
Friday.

"Serbia says it supports the territorial integrity of
Ukraine, yet it welcomes Putin with a military parade and its soldiers
are training with the army that annexed Crimea and is fighting in
Ukraine," Judah said. "As the (Ukrainian) war goes on this is an
increasingly untenable position and Serbia's government will just annoy
both Russia and its Western friends rather than being on good terms with
all."

Serbian Defense Minister Bratislav Gasic said he believes
Serbian "neutrality" is tenable and defended holding the drill with the
Russians. "There are no
secrets about this exercise," he said after the drills that included a
mock live-ammunition attack against a terrorist base with armored
vehicles and about 200 troops, some deployed by Ilyushin IL-76 transport
aircraft.

"We are militarily neutral
and we would like to maintain good relations with everyone, including
Russia, the European Union, the United States and China," Gasic said,
adding that Serbia — which has never been part of any Russian or Western
military alliance — will also hold military drills with the Americans
next month in Serbia.In Washington, State Department Spokeswoman Jen Psaki called the military exercise regrettable.

"Although
it is our understanding that this Russian-Serbian joint military drill
had been planned for some time, we regret that Serbia decided to
proceed. In light of Russia's actions in Ukraine and its disregard of
international law and norms, this is no time for 'business as usual'
with Russia," Psaki told The Associated Press.

The people of Moldova demonstrated their desire to build closer ties with Russia and the Russia-led Customs Union

Sunday’s parliamentary elections in Moldova showed major success of the
country’s pro-Russian forces, a Russian political scientist said on
Monday. Struggle between supporters and opponents of European integration was
in the focus of the election campaign that ended on November 30. For
that reason, the polls were called a foreign policy referendum. In
summer, Moldova signed an association agreement with the European Union,
which cancelled visas for Moldovan citizens. Opinion polls, however
showed that the majority of the population in Moldova wanted integration
with the Customs Union. More than 90 % of people in the unrecognized
Dniester Republic and the Gagauz Autonomy also voted for the integration
with the Customs Union (Russia, Belarus, Kazakhstan and Armenia) at
their referendums.

“It is clear that the current elections were a major success for the
pro-Russian forces,” Grigory Dobromelov, director of the Institute of
Applied Political Studies, said.

The
people of Moldova demonstrated their desire to build closer ties
with Russia and the Russia-led Customs Union, Dobromelov went on to say.
He stressed the importance of Russia’s decision to declare a migration
amnesty for Moldovans working in Russia from November 5 to 30.
Konstantin Romodanovsky, the head of the Russian Federal Migration
Service, who met Igor Dodon, the head of the Moldovan Party of
Socialists, early in November, said that FMS would allow Moldovans who
had violated migration rules to go home and take part in the vote. He
also promised they would face no barriers or obstacles upon their return
to Russia and would be given assistance in getting work permits.

“That step, which was absolutely unique in its nature, produced a
significant impact on the state of mind of Moldovan voters. It was
extremely important for them that Russia had singled Moldova out of
other allies and countries that supply migrants to it,” Dobromelov
explained.

He
said that Russia has carried out a deep analysis of processes that
are taking place in Moldova and that its decision was based on the
right vision and understanding of the situation in the country. “We did
not do anything to exert pressure on the people of Moldova
but we did, however, do everything to persuade them into making a
pro-Russian choice,” Dobromelov concluded.

For the moment, vote count has been completed at 89.4% of the polling
stations. The opposition Party of Socialists received 21% of votes;
Moldova’s Liberal-Democratic Party (19%); the Communist Party of Moldova
that led the elections in the past 15 years gained (17.9%); the
Democratic Party of Moldova (15.7%); the Liberal Party of Moldova /9%/.

According
to the monitors, these figures make it possible to predict
that a coalition of pro-European parties has a chance to form a
parliamentary majority, which, nevertheless, will have to reach an
agreement with the opposition to elect a new president. Incumbent
President Nicolae Timofti is ending his tenure in 2015. The inability to
reach a consensus in appointing the country’s new president plunged
Moldova into chaos in 2009. According to Moldova’s Central Electoral
Commission, the turnout at
November 30 parliamentary elections was 55%, which was a drop of 8%
since 2010.

Russia's Foreign Ministry said on
Wednesday there had been "gross violations" of election rules during
the campaign for the Nov. 30 parliamentary election in Moldova and on
voting day. International monitors said the election had been well-run but
criticized a last-minute decision to exclude the party of Russian
businessman Renato Usatii from the race on the grounds that it had been
funded from abroad. "Moscow has taken note of international experts' assessments
following the results of the parliamentary elections in Moldova," the
ministry said in a statement. "At the same time one cannot ignore that the conclusions
on their transparent and democratic character do not go down well, with
gross violations allowed in the preparations and the conduct of the
election process." Three pro-European parties look likely to form a new ruling coalition
after the vote even though Moldova's Socialist Party, which favors
joining a Russia-led economic bloc rather than moving toward the
European Union, won the most votes. The ministry said the results showed many Moldovans want
deeper ties with Moscow, which supports close ties with Transdniestria, a
pro-Russian breakaway region in Moldova.

As part of our series on Russia’s relations with its European
neighbours, we put the spotlight on Bulgaria. The country’s old tensions
over commitments to East or West have come to the fore over the Ukraine
crisis and were a key issue during the general election earlier this
month. Sofia-based international relations expert Plamen Ralchev looks
at where Bulgaria goes from here.

Modern relations between Bulgaria and Russia began about two
centuries ago when Russia sought geopolitical advantages in the Balkans
and strategic access to the Turkish Straits. Russia positioned herself
as a guardian of Balkan Orthodox Christians in the Ottoman Empire, which
included the people in latterday Bulgaria. With linguistic similarities
also in common, the Russians became supporters of the 19th-century
Bulgarian liberation movement against the Ottoman rule.

By the time of the Russian-Turkish war of 1877-78, Russia’s
paternalistic approach to Bulgaria nurtured a kind of dependency
mentality among many Bulgarians. After the Ottoman defeat and the
subsequent congress of Berlin, Russia ended up with a mandate to supervise the Principality of Bulgaria that emerged.

Bulgarian bed-hopping

Both the Bulgarian public and Russian-speaking elite were deeply in
favour of Russian involvement as the army, police force and public
administration were set up. Yet sentiment became more divided after 1885
as the question of full statehood moved up the agenda. And when
Bulgaria embarked on a modernisation project in the late 19th century,
it tacked towards the European mainstream and particularly Germany.

This continued until after the Yalta conference of 1945,
when Bulgaria was relinquished to Soviet influence. For the next 45
years Soviet dominance built upon previous pro-Russian sentiments in
Bulgarian society. This turned the country into a communist stronghold,
the staunchest and most obedient Soviet ally.

Bulgaria lost prestige internationally and became heavily dependent
on the Soviets. Even after the fall of the Communist regime in 1989,
Bulgaria was hesitant for several years about which way to go. And in
the intervening years of Euro-Atlantic integration, the pro and
anti-Russian divisions have re-emerged at every challenge.

Bulgaria joined NATO (2004) and the European Union (2007), and signed an agreement
with the US in 2006 for a joint military training facility within the
country, all of which have been heavy blows to Russia. This has put
Bulgaria in a precarious position because the Russians have various
kinds of leverage over her.

Life’s not a gas

Bulgaria has remained energy-dependent on Russia due to the unwise
political choices of several governments. Not only does Russia provide
most of its gas, the Russian energy giant Lukoil owns Bulgaria’s only
oil refinery. Lukoil and Gazprom also have a network of petrol and gas
stations throughout the country. Bulgaria depends on Russia for all of its nuclear fuel (though it recently signed
a deal to have a new reactor built by Japanese-owned Westinghouse). The
net result of this energy dominance is that Russia maintains a strong
“energy lobby” in Bulgarian political and expert circles.

In recent months this lobby has been working overtime over the “South
Stream” pipeline, which is being built from Russia across the Black
Sea, through the Balkans to north-east Italy. Crucially this gives the
Russians a second gas export route to Europe that doesn’t go through
Ukraine. Bulgaria ordered work on the pipeline to stop in the summer
under pressure from Brussels that it did not conform to EU law. It
appears not to have resumed since.

Disagreements over the suspension were among various issues that
helped bring down the Bulgarian coalition government in July. This led
to an election earlier in October, where the pipeline was a key point of
debate. The pro-suspension centre-right GERB party finished first, but
it is not yet clear whether it can form a stable coalition.

Inferiority complex

Aside from energy, Russia is heavily interested in the Bulgarian
military-industrial complex, most of whose equipment is Soviet-made and
depends on Russia for maintenance. The outgoing Bulgarian defence
minister was recently quoted saying
this puts the country in a vulnerable position, particularly regarding
its ageing jet fighters. Any question of upgrading with equipment from
elsewhere runs counter to Russian interests, so is unlikely to be
welcomed by Moscow.

Russian companies’ and citizens’ investments in Bulgarian property
have meanwhile increased in recent years, while the Bulgarian tourist
industry relies on Russian visitors. Russia is also good at using
propaganda. It frequently puts a spin on assistance or benefits to
Bulgaria as being “from Moscow with love”. This is attractive to those
Bulgarians whose affection for Russia remains strong. And it suits
Russia when the Bulgarians are unsure whether to look East or West, such
as during the Ukraine crisis.

The Russians see this as an opportunity to tip the scales by playing
one side against the other. This cropped up over South Stream, for
instance, where there are rumours that the previous government would
have allowed the pipeline work to continue despite the EU objections.
Some observers believe that Russia will also have a hand in determining
the make-up of the next coalition government.

If Bulgaria is to overcome its Russian obsession and inferiority
complex, the elite needs to use more political imagination and be more
willing to make difficult policy choices. It cannot handle its eastern
neighbour alone, because Russia is much more powerful. If the EU and US
are determined to play tough on Russia, Bulgaria is one of the places
where they will have to face their opponent. The security context will
be determined by whether the West stands firmly alongside Bulgaria, and
whether the Bulgarian government sustains Russian pressure or opts to
“play both ways”.

Bulgaria unfortunately has to survive in a swirl where the European
mainstream meets the Russian current near the Turkish Straits. Having
had to cope with the interference of Russia, Germany and Turkey
throughout its existence, these countries still have the biggest stakes
in Bulgaria’s future.

It is not that Bulgaria could become another Ukraine, since here
Russia has always preferred to play in the shadows. There is no
Russian-speaking population with an identity crisis that presents a
similar opportunity. Rather it is a question of influence and political
decisions. Being in NATO and the EU gives Sofia certain credentials with
the West. But it has to strengthen these further to curb the
pro-Russian drift and overcome the two countries' complex and
deep-rooted past.

Will Bulgaria be the next testing ground in the escalating
confrontation between Putin’s Russia and the West—and why should you
care? The answer may have something to do with gas.

Follow the Pipelines

“If the Russians get their way in Ukraine, we will be the next
country they will turn their attention to,” said Evgeniy Dainov, a
political science and sociology professor at New Bulgarian University in
Sofia, Bulgaria’s capital. He is a staunch critic of the Kremlin who nevertheless refuses to
support a Western initiative to wean Bulgaria off Russian energy by
letting big American companies such as Chevron “frack” in its most fertile land. Just like Crimea and the Donbass region of Ukraine, where clashes are
currently taking place, Bulgaria has considerable shale gas
reserves—and these reserves are near the heart of the East-West dispute.

A Russian Trojan Horse?

Bulgaria was once the Soviet Union’s most loyal ally—now it’s a
member of the European Union and NATO but it continues to have close
economic and cultural ties with Russia. So much so, in fact, that some
Europeans worry that having Bulgaria in their midst will prove to be a “Trojan horse” from Russia. The Bulgarians—along with the rest of Europe, and the West—are
nervous about what they view as Russia’s intensifying expansionism:
Kremlin influence inevitably follows direct investments and business
deals with Russian entities. These can quickly morph into channels of
political pressure—as in the 2009 Russia-Ukraine gas dispute, when the Russians cut off the gas to 16 European Union countries.

Those Who Can Be Intimidated

A senior fellow and head of the European Council on Foreign Relations’ Bulgarian office, Dimitar Bechev explained to WhoWhatWhy his view on how Russia wields its power: “The Russian regime has a very cynical attitude and divides people
into two categories: those who can be intimidated and those who can be
bought.” Those who can be intimidated would include the Bulgarians, for many
reasons. One reason: they depend on Russia for 90 percent of their
natural gas, and they saw what happened during the Russia-Ukraine gas
dispute (see map above).

There seems to be no limit to those who can be bought. Though Russia complains about “Nazis” in Ukraine, it has been funding extreme-right movements around Europe, which helps explain why the main ultranationalist party in Bulgaria just threatened to
bring down the Sofia government if it approves sanctions against
Russia. “It is obvious that Russia is co-opting people and buying
influence—these methods are much more visible in the former Soviet
countries, but are also being implemented throughout the Balkans, in
Bulgaria as well as in Serbia, Montenegro, Bosnia and elsewhere,” Bechev
said.

Russian money has helped produce an odd-fellows alliance between the
far right and the left in Bulgaria—though in the case of the Bulgarian
Socialist Party, which controls the current coalition government and is
also widely perceived as a conduit of Russian influence, there is more
than money involved. It is the successor of the former Communist Party,
whose graying constituency remembers fondly the old regime.

Western Interference Not Welcome Either

However, it’s not just financial self-interest or a kind of
institutional nostalgia that leads Bulgarians to be suspicious of the
West and its own brand of neo-liberal expansionist policies. Many
Bulgarians have bitter personal memories of Western interference in
their affairs in the post-Communist era. Indeed, Western-supported
“economic liberalization” focused on the fire sale of state-owned
industries contributed to the country’s financial ruin in the 1990s. As
an editor for Anthropology News observed:

“Thugs were everywhere. In almost every
nice restaurant I visited, there were thick-necked former wrestlers with
handguns shoved into the backs of their pants, bodyguards of the new
superrich. Rapid economic liberalization created economic growth, but
this wealth was concentrated in the hands of a new domestic pack of
oligarchs. Western investors had no problem doing business with these
robber barons, people who did not innovate or produce, but who bribed
and stole their way to wealth. Government regulators were happy to sell
off state assets at reduced prices as long as they were given their
generous slice of the spoils.”

Then, once the failure of the precipitous “economic liberalization”
was clear, the IMF came in 1997 and imposed fiscal austerity on the
country—in effect, punishing ordinary Bulgarians for the economic
collapse brought on by the previous Western-imposed policy. “Fiscal
austerity” involved cutting budget deficits through reduced government
spending, which meant, among other things, lower incomes for Bulgarian
workers.

“Bulgaria provides stark evidence that an economic strategy based on
low wages and labour market flexibility will fail,” the International
Trade Union Confederation wrote in
a prescient report in 2012. “For more than a decade Bulgaria has been
encouraged to pursue such a strategy by both the IMF and the European
Union…. The Bulgaria record demonstrates that the draconian labour
market reforms being forced on workers in Greece, Portugal, Spain, Italy
and other peripheral countries in Europe are misplaced.”

Just a year after the report was published, the failure of this
second Western-imposed policy had resulted in daily protest marches in
front of Parliament. Sociologists from the Sofia-based polling agency
Alpha Research concluded in a report that “Bulgarian society is sliding down the spiral of institutional and political collapse.”

If parts of this story sounds similar to Ukraine’s, it is hardly a
coincidence. When Ukraine, mired in financial trouble, applied to the
IMF for financial aid last year, the IMF demanded painful austerity
reforms, among them an end to fuel subsidies to Ukrainian families. The
Ukrainian government refused
and turned to Russia, which offered $15 billion with foreign policy
strings attached but no demands that would hurt the average Ukrainian.
The rest is history. (It bears noting that the new revolutionary
government finally forced the subsidy cut through last month.)

It’s no surprise, then, that at a recent pro-Ukraine demonstration in
Bulgaria, few people viewed things as black and white. One demonstrator
articulated his nuanced frustration this way: “I am here to protest the
interference of all foreign powers in Bulgaria, as well as in Ukraine.”

Russia tightened its control
Monday over Georgia's breakaway province of Abkhazia with a new treaty
envisaging closer military and economic ties with the lush sliver of
land along the Black Sea. The move drew
outrage and cries of "annexation" in Georgia and sent a chill through
those in Abkhazia who fear that wealthy Russians will snap up their
precious coastline. It also raised further suspicions in the West about
Russian President Vladimir Putin's territorial aspirations after his
annexation of Ukraine's Black Sea peninsula of Crimea in March.

Under
the treaty signed by Putin and Abkhazia's leader in the nearby Black
Sea resort of Sochi, Russian and Abkhazian forces in the territory will
turn into a joint force led by a Russian commander. Putin said Moscow
will also double its subsidies to Abkhazia to about 9.3 billion rubles
(over $200 million) next year.

"I'm
sure that cooperation, unity and strategic partnership between Russia
and Abkhazia will continue to strengthen," he said. "Ties
with Russia offer us full security guarantees and broad opportunities
for socio-economic development," Abkhazian President Raul Khadzhimba
said.

Russian troops have been
deployed in Abkhazia for more than two decades since the region of
240,000 people broke away from Georgia in a separatist war in the early
1990s. Still, Monday's agreement reflected a clear attempt by Moscow to
further expand its presence and came only after a change of leadership
in the territory.

Coming amid
a chill in Russia-West ties over the Ukrainian crisis, the deal raised
concern about Moscow's plans. The Black Sea region has always been
important for Putin, who justified the annexation of Crimea by saying it
would guarantee that NATO warships would never be welcome on the
peninsula, the home base of the Russian Black Sea Fleet.

NATO's
secretary-general condemned the treaty, stressing that the alliance
supports Georgia's sovereignty. He also called on Russia to reverse its
recognition of Abkhazia and South Ossetia, another breakaway province,
as independent states.

"This
so-called treaty does not contribute to a peaceful and lasting
settlement of the situation in Georgia," Jens Stoltenberg said. "On the
contrary, it violates Georgia's sovereignty and territorial integrity
and blatantly contradicts the principles of international law, OSCE
principles and Russia's international commitments."

The U.S. also said it wouldn't recognize Russia's move and expressed continued support for Georgia's sovereignty.

"The United States will not recognize the legitimacy of any
so-called 'treaty' between Georgia's Abkhazia region and the Russian
Federation," the U.S. State Department said in a statement. Abkhazia's
former leader, Alexander Ankvab, was forced to step down earlier this
year under pressure from protesters who reportedly were encouraged by
the Kremlin. Khadzhimba, a former Soviet KGB officer, was elected
president in an early vote in August that Georgia rejected as illegal.

Unlike
Ankvab, who had resisted Moscow's push to let Russians buy assets in
Abkhazia, Khadzhimba has appeared more eager to listen to Russia's
demands. The Georgian Foreign
Ministry denounced the new agreement as a "step toward the de-facto
annexation" of Abkhazia and called on the international community to
condemn the move. Russian-Georgian relations were ruptured by war
in August 2008 after former Georgian President Mikhail Saakashvili
attempted to restore control over South Ossetia. The Russian military
routed the Georgian forces in five days and Moscow recognized both rebel
provinces as independent states.

The
Georgian Dream bloc led by Russia-friendly billionaire Bidzina
Ivanishvili, which unseated Saakashvili's party in the 2012 vote, has
sought to repair ties with Moscow. But while economic relations have
improved, political ties have remained frozen because of Moscow's
refusal to compromise on the status of Georgia's separatist regions.

Saakashvili's United National Movement party has accused the Georgian government of kowtowing to Moscow. "The
Georgian government has done practically nothing," said party leader
David Bakradze, who urged the government to join Western sanctions
against Russia and opt out of political talks with Moscow.

In Russia they start voicing plans for the “opening” of a straight way
to Armenia via Georgia. In particular, this is what deputy director of
the Center of Strategic Situations Mikhail Chernov wrote in his article
on the Russian lenta.ru portal. His article was taken as a provocation
and probing of sentiments, still it caused a sharp reaction both in
Armenia and Georgia.

The essence of the article by Chernova is that the military-strategic
treaties between Russia, Abkhazia and South Ossetia, which are being
prepared for signing, may become prerequisites for Russia’s reaching the
border with Armenia. Now the only overland route from Russia to Armenia
lies through Georgia, and it is almost an insurmountable obstacle for
the integration of Armenia into the “neo-Soviet” space.

The texts of the treaties are already in the Russian State Duma, and,
according to Chernov, “the institution of bilateral treaties may become a
new tool of Russian foreign policy allowing Russia to meet its
objectives in the South Caucasus without unnecessary complications in
international relations.”

“Russia has two such basic tasks in the region and they are closely
related to each other. The first one is to prevent the creation of NATO
military infrastructure in Georgia. The second objective is to ensure a
reliable direct transport link with Armenia,” the Russian expert says.
Besides, control of the Russian Federation over transport communications
will provide full functioning of the Russian military base in Armenia.

The mechanism has also been devised. It turns out that on October 31
Vladikavkaz, the capital of Russia’s republic of North Ossetia hosted a
congress of the International Public Movement called “The Supreme
Council of the Ossetians”, which was also attended by former president
of South Ossetia Eduard Kokoity. He raised the question of Trusovsky
gorges and Kobin hollow being part of Ossetia. Presence in Kazbegi
region will make it possible to control a small section of the
strategically important Georgian Military Highway – the shortest route
from Russia to Armenia.

“At the same time, Russia is more interested in the development of the
Trans-Caucasian Highway. The ‘western’ route to Armenia passes through
the Gori district, bypasses Trialet Ossetia, where a considerable number
of Ossetians lived before the early 1990s, as well as the
Armenian-populated Samtskhe-Javakheti region,” Chernov writes.

He hopes that if by some chance in Georgia on the basis of the current
political crisis Maidan-like events start, Russia may introduce troops
into Georgia for the “protection” of Ossetians and thus open up its
route towards Armenia.

In an interview with Newspost former defense minister of Georgia Dimitri
Shashkin said: “Alarm should be sounded over the document relating to
the Tskhinvali region, which officially entered the [Russian State]
Duma. Russian experts have already started openly speaking about the
threat that concerns Russia’s big desire to create a direct link with
its base in Gyumri (Armenia).”

According to Shashkin, on the basis of treaties being prepared with
Abkhazia and Tskhinvali Russia is openly stating that it will protect
them against Georgians.

“[Russian] protection of Georgian regions is another new challenge. It
turns out that if about a hundred people are paid for setting up a group
of provocateurs, they [Russians] may invade Kakheti in order to protect
the local population. A hundred provocateurs can be found easily,”
Shashkin said.

No official reaction to these statements have yet been made in Armenia,
Georgia and Russia, however, at the level of experts there are opinions
that such provocations can sow discord between Georgians and Armenians.
Former Georgian Defense Minister Irakli Alasania, who stepped down
recently, has repeatedly stated that the Russian base in Armenia is a
threat for Georgia. It is these threats that do not allow Georgia and
Armenia to establish mutually beneficial relations.

Georgia is ready to provide Armenia with a free transit corridor for
exporting its goods to the Eurasian Economic Union, Armenian deputy
economy minister Emil Tarasyan said Wednesday during a public discussion
on Armenian exports to the Russia-led trade bloc organized by the Union
of Industrialists and Entrepreneurs of Armenia.

According to him, the issue on the transit of Armenian cargo through
the territory of Georgia was included in the list of the main documents
that Armenia signed with the Eurasian Economic Union, “because Armenia
is the only country of the trade bloc that shares no common border with
any of the bloc’s members.”

“Today we are working to secure an uninterrupted shipment of Armenian
goods to the Eurasian Economic Union’s markets,” said Tarasyan, adding
that Armenian goods will be exempted from customs checks at the border.

Armenia formally joined the Eurasian Economic Union on October 10.
The agreement was signed by the heads of Russia, Belarus, Kazakhstan and
Armenia in Minsk, Belarus. The agreement on establishment of the
Eurasian Economic Union comes into force in 2015. Russia may open a “green corridor” for Armenian trucks at Upper Lars
border crossing on its frontier with Georgia, Gagik Kocharyan, a senior
official of the Armenian economy ministry, said.

The
Upper Lars is the only overland conduit to the outside world for
Armenian businesses. It is of utmost importance for Armenia, which is
subjected to transportation blockade by Azerbaijan and Turkey. According
to Kocharyan, Armenian diplomats in Russia are discussing now the green
corridor “issue with the Russian side.

In turn, the chairman of the Union of Industrialists and
Entrepreneurs, Arsen Ghazaryan, said Armenian business people are facing
problems now when going through the Upper Lars crossing because of the
large number of trucks.

“Since Turkey did not join the Western sanctions against Russia, it
has significantly increased its exports to the Russian Federation,
carried out mainly by trucks. As a result, Armenian trucks have to stand
in long lines at the checkpoint,” said Ghazaryan.

Around 40 states have plans to establish a free trade zone with the
Eurasian Economic Union (EEU), the speaker of Russia’s lower house of
parliament, the State Duma, Sergey Naryshkin, told an international
conference in Kazakhstan’s capital Astana on Monday.

“Five countries of the Commonwealth of Independent States (CIS) have
already made a Eurasian choice, and another 40 countries across the
world have officially voiced their wish to set up a free trade zone with
our integration association,” Naryshkin said.

The Eurasian Economic Union, which comes into force in January 2015,
offers a unique chance for cooperation between Western Europe and the
Asia-Pacific Region, the lawmaker said. The EEU members are currently
Russia, Belarus, Kazakhstan and Armenia. Kyrgyzstan is expected to join
the union soon.

Naryshkin
said those who consider the EEU as a threat only confirm
that “a new and serious geopolitical player is indeed emerging in the
world.” “It will probably build those lacking bridges which will unite
Western Europe with the dynamic Asia-Pacific Region,” he stressed. The
lawmaker warned against regarding the new bloc as a threat,
saying it gives a “unique chance in which the peoples of Europe, Asia
and the world in general are strategically interested.”

Naryshkin
said the Eurasian Economic Union will enlarge. “We see what interest
other states have in the Eurasian Economic Union. I am sure it will
enlarge and strengthen,” he said. The Kazakh Senate’s Chairman
Kasym-Zhomart Tokayev noted the
significance of the EEU formation. “It is an adequate response to what
is happening in the world and to world economy shocks,” he said.

The idea of Eurasian integration was voiced first by Kazakhstan’s
President Nursultan Nazarbayev in 1994. Finally, the Eurasian Economic
Union has been formed and will begin working on January 1, 2015.

The
first attempt to form an economic international organization was
made when the Commonwealth of Independent States concluded an agreement
on an economic union, but the project was not implemented. In 1995,
Russia and Belarus signed an agreement on a customs union, which was
joined by Kazakhstan, Kyrgyzstan and Tajikistan. The countries concluded
an agreement on the Customs Union and the common economic space in 1999
to build a common market.

In
2009, the Russian, Belarusian and Kazakh presidents agreed on a deeper
economic integration form - the Common Economic Space. The three
agreements on the Eurasian Economic Union, the Customs
Union and the Common Economic Space are open for other states to join.

A specter haunts the fast-aging “New American Century”: the
possibility of a future Beijing-Moscow-Berlin strategic trade and
commercial alliance. Let’s call it the BMB.

Its likelihood is being seriously discussed at the highest levels
in Beijing and Moscow, and viewed with interest in Berlin, New Delhi,
and Tehran. But don’t mention it inside Washington’s Beltway or at
NATO headquarters in Brussels. There, the star of the show today and
tomorrow is the new Osama bin Laden: Caliph Ibrahim, aka Abu Bakr
al-Baghdadi, the elusive, self-appointed beheading prophet of a new
mini-state and movement that has provided an acronym feast —
ISIS/ISIL/IS — for hysterics in Washington and elsewhere.

No matter how often Washington remixes its Global War on
Terror, however, the tectonic plates of Eurasian geopolitics continue to
shift, and they’re not going to stop just because American elites refuse to accept that their historically brief “unipolar moment” is on the wane.
For them, the closing of the era of “full spectrum dominance,” as the
Pentagon likes to call it, is inconceivable. After all, the necessity
for the indispensable nation to control all space — military, economic,
cultural, cyber, and outer — is little short of a religious
doctrine. Exceptionalist missionaries don’t do equality. At best, they do “coalitions of the willing” like the one crammed with “over 40 countries”
assembled to fight ISIS/ISIL/IS and either applauding (and plotting)
from the sidelines or sending the odd plane or two toward Iraq or
Syria.

NATO, which unlike some of its members won’t officially fight Jihadistan,
remains a top-down outfit controlled by Washington. It’s never fully
bothered to take in the European Union (EU) or considered allowing
Russia to “feel” European. As for the Caliph, he’s just a minor
diversion. A postmodern cynic might even contend that he was an emissary
sent onto the global playing field by China and Russia to take the eye
of the planet’s hyperpower off the ball.

Divide and Isolate

So how does full spectrum dominance apply when two actual competitor
powers, Russia and China, begin to make their presences
felt? Washington’s approach to each — in Ukraine and in Asian waters —
might be thought of as divide and isolate.

In
order to keep the Pacific Ocean as a classic “American lake,” the Obama
administration has been “pivoting” back to Asia for several years now. This
has involved only modest military moves, but an immodest attempt to pit
Chinese nationalism against the Japanese variety, while strengthening
alliances and relations across Southeast Asia with a focus on South
China Sea energy disputes. At the same time, it has moved to lock a future trade agreement, the Trans-Pacific Partnership (TPP), in place.

In Russia’s western borderlands, the Obama administration has stoked
the embers of regime change in Kiev into flames (fanned by local
cheerleaders Poland and the Baltic nations) and into what clearly looked, to Vladimir Putin and Russia’s leadership, like an existential threat to Moscow. Unlike
the U.S., whose sphere of influence (and military bases) are global,
Russia was not to retain any significant influence in its former near
abroad, which, when it comes to Kiev, is not for most Russians, “abroad”
at all.

For Moscow, it seemed as if Washington and its NATO allies were
increasingly interested in imposing a new Iron Curtain on their country
from the Baltic to the Black Sea, with Ukraine simply as the tip of the
spear. In BMB terms, think of it as an attempt to isolate Russia and
impose a new barrier to relations with Germany. The ultimate aim
would be to split Eurasia, preventing future moves toward trade and
commercial integration via a process not controlled through Washington.

From Beijing’s point of view, the Ukraine crisis was a case
of Washington crossing every imaginable red line to harass and isolate
Russia. To its leaders, this looks like a concerted attempt to
destabilize the region in ways favorable to American interests,
supported by a full range of Washington’s elite from neocons and Cold
War “liberals” to humanitarian interventionists in the Susan Rice and
Samantha Power mold. Of course, if you’ve been following the Ukraine
crisis from Washington, such perspectives seem as alien as any those of
any Martian. But the world looks different from the heart of Eurasia
than it does from Washington — especially from a rising China with its
newly minted “Chinese dream” (Zhongguo meng).

As laid out by President Xi Jinping, that dream would include a
future network of Chinese-organized new Silk Roads that would create the
equivalent of a Trans-Asian Express for Eurasian commerce. So if
Beijing, for instance, feels pressure from Washington and Tokyo on the
naval front, part of its response is a two-pronged, trade-based advance
across the Eurasian landmass, one prong via Siberia and the other
through the Central Asian “stans.”

In this sense, though you wouldn’t know it if you only followed the
American media or “debates” in Washington, we’re potentially entering a
new world. Once upon a time not so long ago, Beijing’s leadership was
flirting with the idea of rewriting the geopolitical/economic game side
by side with the U.S., while Putin’s Moscow hinted at the possibility of
someday joining NATO. No longer. Today, the part of the West
that both countries are interested in is a possible future Germany no
longer dominated by American power and Washington’s wishes.

Moscow has, in fact, been involved in no less than half a century of
strategic dialogue with Berlin that has included industrial cooperation
and increasing energy interdependence. In many quarters of the Global
South this has been noted and Germany is starting to be viewed as “the sixth BRICS” power (after Brazil, Russia, India, China, and South Africa).

In the midst of global crises ranging from Syria to Ukraine, Berlin’s geostrategic interests seem to be slowly diverging from Washington’s.
German industrialists, in particular, appear eager to pursue unlimited
commercial deals with Russia and China. These might set their country
on a path to global power unlimited by the EU’s borders and, in the long term, signal the end of the era in which Germany, however politely dealt with, was essentially an American satellite.

It will be a long and winding road. The Bundestag, Germany’s
parliament, is still addicted to a strong Atlanticist agenda and a
preemptive obedience to Washington. There are still tens of thousands of
American soldiers on German soil. Yet, for the first time, German
chancellor Angela Merkel has been hesitating when it comes to imposing
ever-heavier sanctions on Russia over the situation in Ukraine, because
no fewer than 300,000 German jobs depend on relations with that country. Industrial leaders and the financial establishment have already sounded the alarm, fearing such sanctions would be totally counterproductive.

China’s Silk Road Banquet

China’s new geopolitical power play in Eurasia has few parallels in
modern history. The days when the “Little Helmsman” Deng Xiaoping
insisted that the country “keep a low profile” on the global stage are
long gone. Of course, there are disagreements and conflicting
strategies when it comes to managing the country’s hot spots: Taiwan,
Hong Kong, Tibet, Xinjiang, the South China Sea, competitors India and
Japan, and problematic allies like North Korea and Pakistan. And popular unrest in some Beijing-dominated “peripheries” is growing to incendiary levels.

The country’s number one priority remains domestic and
focused on carrying out President Xi’s economic reforms, while
increasing “transparency” and fighting corruption within the ruling
Communist Party. A distant second is the question of how to
progressively hedge against the Pentagon’s “pivot” plans in the region —
via the build-up of a blue-water navy, nuclear submarines, and a
technologically advanced air force — without getting so assertive as to
freak out Washington’s “China threat”-minded establishment.

Meanwhile, with the U.S. Navy controlling global sea lanes for the
foreseeable future, planning for those new Silk Roads across Eurasia is
proceeding apace. The end result should prove
a triumph of integrated infrastructure — roads, high-speed rail,
pipelines, ports — that will connect China to Western Europe and the
Mediterranean Sea, the old Roman imperial Mare Nostrum, in every imaginable way.

In a reverse Marco Polo-style journey, remixed for the Google
world, one key Silk Road branch will go from the former imperial capital
Xian to Urumqi in Xinjiang Province, then through Central Asia, Iran,
Iraq, and Turkey’s Anatolia, ending in Venice. Another will be a
maritime Silk Road starting from Fujian province and going through the
Malacca strait, the Indian Ocean, Nairobi in Kenya, and finally all the
way to the Mediterranean via the Suez canal. Taken together, it’s what
Beijing refers to as the Silk Road Economic Belt.

China’s strategy is to create a network of interconnections among no less than five key regions:
Russia (the key bridge between Asia and Europe), the Central Asian
“stans,” Southwest Asia (with major roles for Iran, Iraq, Syria, Saudi
Arabia, and Turkey), the Caucasus, and Eastern Europe (including
Belarus, Moldova, and depending upon its stability, Ukraine). And don’t
forget Afghanistan, Pakistan, and India, which could be thought of as
Silk Road plus.

Silk Road plus would involve connecting the
Bangladesh-China-India-Myanmar economic corridor to the China-Pakistan
economic corridor, and could offer Beijing privileged access to the
Indian Ocean. Once again, a total package — roads, high-speed rail, pipelines, and fiber optic networks — would link the region to China.

Xi himself put the India-China connection in a neat package of images in an op-ed he published in the Hindu prior to his recent visit to New Delhi. “The
combination of the ‘world’s factory’ and the ‘world’s back office,’” he
wrote, “will produce the most competitive production base and the most
attractive consumer market.”

The central node of China’s elaborate planning for the Eurasian
future is Urumqi, the capital of Xinjiang Province and the site of the
largest commercial fair in Central Asia, the China-Eurasia Fair. Since
2000, one of Beijing’s top priorities has been to urbanize that largely
desert but oil-rich province and industrialize it, whatever it takes.
And what it takes, as Beijing sees it, is the hardcore Sinicization of
the region — with its corollary, the suppression of any possibility of
ethnic Uighur dissent. People’s Liberation Army General Li Yazhou
has, in these terms, described Central Asia as “the most subtle slice of
cake donated by the sky to modern China.”

Most of China’s vision of a new Eurasia tied to Beijing by every form
of transport and communication was vividly detailed in “Marching
Westwards: The Rebalancing of China’s Geostrategy,” a landmark 2012
essay published by scholar Wang Jisi of the Center of International and
Strategic Studies at Beijing University. As a response to such a
future set of Eurasian connections, the best the Obama administration
has come up with is a version of naval containment from the Indian Ocean
to the South China Sea, while sharpening conflicts with and strategic
alliances around China from Japan to India. (NATO is, of course, left
with the task of containing Russia in Eastern Europe.)

An Iron Curtain vs. Silk Roads

The $400 billion
“gas deal of the century,” signed by Putin and the Chinese president
last May, laid the groundwork for the building of the Power of Siberia
pipeline, already under construction in Yakutsk. It will bring a flood
of Russian natural gas onto the Chinese market. It clearly represents just the beginning of a turbocharged, energy-based strategic alliance between the two countries.
Meanwhile, German businessmen and industrialists have been noting
another emerging reality: as much as the final market for made-in-China
products traveling on future new Silk Roads will be Europe, the reverse
also applies. In one possible commercial future, China is slated to
become Germany’s top trading partner by 2018, surging ahead of both the U.S. and France.

A potential barrier to such developments, welcomed in Washington, is
Cold War 2.0, which is already tearing not NATO, but the EU apart. In
the EU of this moment, the anti-Russian camp includes Great Britain,
Sweden, Poland, Romania, and the Baltic nations. Italy and Hungary, on
the other hand, can be counted in the pro-Russian camp, while a still
unpredictable Germany is the key to whether the future will hold a new
Iron Curtain or “Go East” mindset. For this, Ukraine remains
the key. If it is successfully Finlandized (with significant autonomy
for its regions), as Moscow has been proposing — a suggestion that is
anathema to Washington — the Go-East path will remain open. If not, a
BMB future will be a dicier proposition.

It should be noted that another vision of the Eurasian economic future is also on the horizon. Washington
is attempting to impose a Transatlantic Trade and Investment
Partnership (TTIP) on Europe and a similar Trans-Pacific Partnership
(TPP) on Asia. Both favor globalizing American corporations and
their aim is visibly to impede the ascent of the BRICS economies and the
rise of other emerging markets, while solidifying American global
economic hegemony.

Two stark facts, carefully noted in Moscow, Beijing, and Berlin,
suggest the hardcore geopolitics behind these two “commercial” pacts. The TPP excludes China and the TTIP excludes Russia.
They represent, that is, the barely disguised sinews of a future
trade/monetary war. On my own recent travels, I have had quality
agricultural producers in Spain, Italy, and France repeatedly tell me
that TTIP is nothing but an economic version of NATO, the military
alliance that China’s Xi Jinping calls, perhaps wishfully, an “obsolete
structure.”

There is significant resistance to the TTIP among many EU nations
(especially in the Club Med countries of southern Europe), as there is
against the TPP among Asian nations (especially Japan and Malaysia). It
is this that gives the Chinese and the Russians hope for their new Silk
Roads and a new style of trade across the Eurasian heartland backed by a
Russian-supported Eurasian Union. To this, key figures in German business and industrial circles, for whom relations with Russia remain essential, are paying close attention.

After all, Berlin has not shown overwhelming concern for the rest of
the crisis-ridden EU (three recessions in five years). Via a
much-despised troika — the European Central Bank, the International
Monetary Fund, and the European Commission — Berlin is, for all
practical purposes, already at the helm of Europe, thriving, and looking
east for more.

Three months ago, German chancellor Angela Merkel visited Beijing. Hardly
featured in the news was the political acceleration of a potentially
groundbreaking project: an uninterrupted high-speed rail connection
between Beijing and Berlin. When finally built, it will prove a transportation and trade magnet for dozens of nations along its route from Asia to Europe. Passing
through Moscow, it could become the ultimate Silk Road integrator for
Europe and perhaps the ultimate nightmare for Washington.

“Losing” Russia

In a blaze of media attention, the recent NATO summit in Wales
yielded only a modest “rapid reaction force” for deployment in any
future Ukraine-like situations. Meanwhile, the expanding Shanghai
Cooperation Organization (SCO), a possible Asian counterpart to NATO,
met in Dushanbe, Tajikistan. In Washington and Western Europe
essentially no one noticed. They should have. There, China, Russia, and
four Central Asian “stans” agreed to add an impressive set of new members: India, Pakistan, and Iran. The implications could be far-reaching. After all, India under Prime Minister Narendra Modi is now on the brink of its own version of Silk Road mania. Behind it lies the possibility of a “Chindia” economic rapprochement, which could change the Eurasian geopolitical map. At the same time, Iran is also being woven into the “Chindia” fold.

So the SCO is slowly but surely shaping up as the most important international organization in Asia.
It’s already clear that one of its key long-term objectives will be to
stop trading in U.S. dollars, while advancing the use of the petroyuan
and petroruble in the energy trade. The U.S., of course, will never be welcomed into the organization.

All of this lies in the future, however. In the present, the Kremlin
keeps signaling that it once again wants to start talking with
Washington, while Beijing has never wanted to stop. Yet the Obama
administration remains myopically embedded in its own version of a
zero-sum game, relying on its technological and military might to
maintain an advantageous position in Eurasia. Beijing, however, has
access to markets and loads of cash, while Moscow has loads of energy.
Triangular cooperation between Washington, Beijing, and Moscow would
undoubtedly be — as the Chinese would say — a win-win-win game, but
don’t hold your breath.

Instead, expect China and Russia to deepen their strategic
partnership, while pulling in other Eurasian regional powers. Beijing
has bet the farm that the U.S./NATO confrontation with Russia over
Ukraine will leave Vladimir Putin turning east. At the same time, Moscow is carefully calibrating what its ongoing reorientation toward such an economic powerhouse will mean.Someday, it’s possible that voices of sanity in Washington will be wondering aloud how the U.S. “lost” Russia to China.

In the meantime, think of China as a magnet for a new world order in a
future Eurasian century. The same integration process Russia is
facing, for instance, seems increasingly to apply to India and other Eurasian nations, and possibly sooner or later to a neutral Germany as well. In
the endgame of such a process, the U.S. might find itself progressively
squeezed out of Eurasia, with the BMB emerging as a game-changer. Place
your bets soon. They’ll be called in by 2025.

President
Obama flies to Beijing on Sunday to renew efforts to refocus American
foreign policy toward Asia. But when he lands, he will find the man who
has done so much to frustrate him lately, President Vladimir V. Putin of Russia. “You are pivoting to Asia,” Russia’s ambassador to Washington said last week, “but we’re already there.”

Mr. Obama is returning to Asia as Russia pulls closer to China,
presenting a profound challenge to the United States and Europe.
Estranged from the West over Ukraine, Mr. Putin will also be in Beijing
this week as he seeks economic and political support, trying to upend
the international order by fashioning a coalition to resist what both
countries view as American arrogance.

Whether
that is more for show than for real has set off a vigorous debate in
Washington, where some government officials and international
specialists dismiss the prospect of a more meaningful alliance between Russia and China
because of the fundamental differences between the countries. But
others said the Obama administration should take the threat seriously as
Moscow pursues energy, financing and military deals with Beijing.

“We
are more and more interested in the region that is next to us in Asia,”
said Sergei I. Kislyak, the Russian ambassador to Washington. “They are
good partners to us.” He added that a recent natural gas deal between Moscow and Beijing was a taste of the future. “It’s just the beginning,” he said, “and you will see more and more projects between us and China.”

The Russian pivot to China
factors into a broader White House-led review of American policy toward
Moscow now underway. The review has produced several drafts of a policy
to counter what officials call Putinism over the long term while still
seeking silos of cooperation, particularly on issues like Iran,
terrorism and nuclear nonproliferation.

Though
there is not a wide divergence of opinion inside the administration
over how to view Mr. Putin, there is a debate about what to do. The
review has pitted officials favoring more engagement against those
favoring more containment, according to people involved. The main
question is how the Ukraine dispute should define the relationship and
affect other areas where the two countries share interests.

Within the administration, Mr. Putin’s efforts at accord with China
are seen as a jab at Washington, but one fraught with a complicated
history, mutual distrust and underlying economic disparity that
ultimately makes it untenable. “They’ll use each other,” said one
government official, who declined to be identified discussing the
internal review. “And when one of them gets tired or sees a better deal,
they’ll take it.”

But
others warned against underestimating the potential. “There’s just so
much evidence the relationship is getting stronger,” said Gilbert
Rozman, a Princeton scholar who published a book, “The Sino-Russian
Challenge to the World Order,” this year and an article
in Foreign Affairs on the subject last month. The rapprochement began
before Ukraine, he added, but now there is a “sense that there’s no
turning back. They’re moving toward China.”

Graham
Allison, director of the Belfer Center for Science and International
Affairs at Harvard, said Mr. Putin seemed to have forged a strong bond
with President Xi Jinping
of China. “There’s a personal chemistry you can see,” he said. “They
like each other, and they can relate to each other. They talk with each
other with a candor and a level of cooperation they don’t find with
other partners.”

Mr. Xi made Russia
his first foreign destination after taking office and attended the
Sochi Olympics as Mr. Obama and European leaders were boycotting them.
Each has cracked down on dissent at home, and they share a view of the
United States as a meddling imperialist power whose mismanagement of the
world economic order was exposed by the 2008 financial crisis.

While
past Chinese leaders looked askance at the Kremlin leader, “Xi is not
appalled by Putin,” said Douglas Paal, an Asia expert at the Carnegie
Endowment for International Peace.

The twin crises in Ukraine and Hong Kong have encouraged the alignment. State television in Russia
portrays democracy protests in Hong Kong as an American-inspired effort
to undermine China, much as it depicted the protests in Kiev as an
American effort to peel away a Russian ally from Moscow. Chinese media present Mr. Putin as a strong leader standing up to foreign intervention.

In May, as the United States and Europe were imposing sanctions on Moscow over Ukraine, Mr. Putin sealed a $400 billion, 30-year deal providing natural gas
to China. Last month, China’s premier, Li Keqiang, signed a package of
38 deals in Moscow, including a currency swap and tax treaty. Last week,
Mr. Putin said the two countries had reached an understanding for
another major gas deal. The
two had already bolstered economic ties. China surpassed Germany in
2010 to become Russia’s largest trading partner, with nearly $90 billion
in trade last year, a figure surging this year as business with Europe
shrinks.

“The
campaign of economic sanctions against Russia and political pressure is
alienating Russia from the West and pushing it closer to China,” said
Sergei Rogov, director of Moscow’s Institute for U.S. and Canada
Studies. “China is perceived in Russia as a substitute for Western
credits and Western technology.”

Masha
Lipman, a visiting fellow with the European Council on Foreign
Relations, said that the pivot to China “is taken very seriously” in
Moscow and that “commentators regard this shift as a given, a done and
irreversible deal.” Yet
talk of a Russian-Chinese alignment has persisted for decades without
becoming fully realized, given deep cultural differences and a Cold War
competition for leadership of the communist world. And Beijing has long
opposed separatist movements, making it uncomfortable with Moscow’s
support for pro-Russian rebels in eastern Ukraine.

In
Moscow, some fear Russia, out of weakness, has made itself a junior
partner to a rising China. While China is now Russia’s largest trading
partner, Russia is only China’s 10th largest
— and the United States remains its biggest. Moreover, big Russian
state companies can make deals, but China will not replace Europe for
most corporations and banks, as there is no developed commercial bond
market for foreigners in China akin to Eurobonds.

John
Beyrle, a former American ambassador to Moscow, said discussions with
Russian business leaders revealed nervousness, a sense that the turn to
China was out of necessity as loans and investment from the West dry up.
“One of them said that dependence on China worries the Russian elite
much more than dependence on the West,” he said.

Lilia
Shevtsova, a Moscow-based analyst with the Brookings Institution, said:
“The pivot is artificial. And the pivot is to the disadvantage of
Russia.”

Mr.
Obama and Mr. Putin will cross paths twice this week, first in Beijing
at the Asia-Pacific Economic Cooperation forum, and then in Brisbane,
Australia, at a meeting of the Group of 20 nations. Mr. Obama hopes to
advance a Trans-Pacific Partnership trade pact. Russia and China are
acutely aware they have been excluded from the proposed bloc, and Mr.
Putin says it would be ineffective without them. Such
issues only fuel Russia’s move to China, Russian officials said. If the
United States and Europe are less reliable, long-term partners, then
China looks more attractive. “We trust them,” said Mr. Kislyak, “and we
hope that China equally trusts us.”

'Putin's Revenge': Russia And China Try To End The Dominance Of The Dollar

Russia and China just agreed to a second major gas deal, worth slightly less than the $400 billion agreement reached earlier this year, according to Bloomberg. The details of the deal mean
Russia will supply China with another 30 billion cubic metres of gas
every year for the next three decades through the Altai pipeline, a
proposed pipe transporting the gas from western Siberia to China.

Many analysts see the move as
evidence that Moscow is pivoting away from reliance on European
customers and toward East Asia, where relatively rapid economic growth
should prop up demand. It's also a political move, as
relations with the rest of Europe have become increasingly cold after
Russia's invasion of Ukraine, and the tit-for-tat sanctions between the
European Union, United States, and Russia.

The value of the Russian rouble
has collapsed recently as the price of oil has declined. Russia's
economy is dependent on oil, so the currency fluctuates with the oil
price. The price declines in turn threaten Russia's ability to meet its
budget obligations and pay debt. In sum, the country faces an economic
crisis if it can't find new demand for oil and currency .

But the rouble is rallying
against the dollar today. Here's the US currency dropping by nearly 3%
against the rouble after the central bank announced it would stop trying to defend the currency's collapse. The China deal helps both Russia
and China lessen their economic dependence on the West. It also helps
Russia get around the economic sanctions imposed by the West because of
the Ukraine situation. The Moscow Times notes:

Curtailing the dollar's
influence fits well with China's ambitions to increase the influence of
the yuan and eventually turn it into a global reserve currency. With 32
percent of its $4 trillion foreign exchange reserves invested in US
government debt, China wants to curb investment risks in dollar. The quest to limit the dollar's
dominance became more urgent for Moscow this year when US and European
governments imposed sanctions on Russia over its support for separatist
rebels in Ukraine.

Andrei Klimov, the Russian Deputy Chairman
of the Federation Council’s Committee on Foreign Affairs, held a press
conference on Friday at Rossiya Segodnya’s multimedia press center,
where he discussed US pressure aimed at the Eurasian Economic Union
project, Russia’s strained relations with PACE, the country’s search for
alternative forums for inter-parliamentary dialogue, and the shift of
the world away from US-based unipolarity.

On US Attempts to Halt the Process of Eurasian Economic Integration

Speaking about the integration processes of the Eurasian Economic
Union, Klimov noted that “in her own time, Mrs. Clinton, as Secretary of
State, said that under no circumstances should Eurasian integration ‘in
the Russian scenario’ be allowed.”

Klimov noted that since then the US has been searching for “weak
links” and is willing to use “any means necessary” to “destabilize the
situation in the countries that neighbor Russia,” noting that such
destabilization measures have most recently been realized in Ukraine.

“They have already done what they could [in Ukraine]...the system has
already been broken...the abscess has been created, the crisis is set
to last a long time, and their direct control [over events] is no longer
necessary,” Klimov said. “They are trying to work via our neighbors. Now in Yerevan [Armenia]
there are attempts to create unrest. There are similar attempts in
Kazakhstan,” he added.

Presently, “the Kazakh people are being told by someone via local
NGOs that their Russian neighbors have some not-very-good thoughts with
regard to Kazakhstan. And we are also told through various ‘experts’
that we will lose more through the Eurasian Union than we gain.”

Noting the aftermath of the color revolutions and other
destabilization attempts, Klimov stated that former Georgian President
Mikhail Saakashvili is presently having trouble entering the US, noting
that “our Ukrainian colleagues would do well to see how the great
friendship with Uncle Sam ends.”

Questions on PACE Membership

Klimov discussed the Parliamentary Assembly of the Council of Europe
(PACE), which deprived Russia of the right to vote, to participate in
its statutory bodies and to monitor activities this past April due to
Russia’s annexation of Ukraine. He said that while Russia sees no reason
to leave the organization, it is far from the only platform for
inter-parliamentary dialogue, and “we should reevaluate our position
within the organization.”

Klimov noted that considering “the global processes which are
occurring today,” there are “a variety of inter-parliamentary
institutions” to work with, adding that Russia has had “a somewhat
exaggerated idea” about the importance and manner of PACE discussions.

“The world is changing, and we shouldn’t remain frozen,” Klimov said.
Still, he added that Russia has made many concessions to enter PACE it
the past, and from an economic perspective, and the perspective of
Russian citizens working, living and vacationing in PACE countries, the
organization remains an important partner for Russia.

Prospects for Other Inter-Parliamentary Platforms

Among the alternative inter-parliamentary platforms which Russia has
recently been reorienting itself towards, Klimov mentioned the
Asia-Europe Parliamentary Partnership Meeting (ASEM), a platform for
inter-parliamentary dialogue stretching from Europe to Asia and Oceania,
and the Inter-Parliamentary Union, an organization Klimov calls “old,
tested and proven.”

Klimov noted that at the most recent ASEM meeting in Rome on October 6-7, calls
were made from all sides for the reform of the International Monetary
Fund and the World Bank. He added that Russia “can’t wait for the reform
of these institutions, which at present are dominated by the West, and
undeservedly so, from our perspective.”

The Senator noted that interesting proposals were made in Rome to
“turn [ASEP] into something similar to PACE...to constitute an
organization,” including a permanent secretariat. “Possibly something
like a Eurasian Assembly will form out of this, which based on our
goals, would be very beneficial [for Russia].”

Klimov noted that one of the reasons Russia is so eager to expand its
participation in ASEP is the country’s size. “Russia has two dozen
neighboring countries, all of them very different from one
another...thus for us, formats where they are all present are
objectively preferable ...[Russia is] a big country, and it’s very
difficult to conduct our international affairs based on small groupings
because what we are dealing with [a dispute somewhere along the
country’s border] is not necessarily interesting to, for example, a
small European country. In this regard, considering our potential and
interests as well as our size, the Inter-Parliamentary Union is [the
most comfortable forum], and we regret that we are only now beginning to
understand this.”

Speaking about the upcoming meeting of the Inter-Parliamentary Union
on October 13 in Geneva, Klimov noted that Russia would bring its White Book on human rights violations in Ukraine, as well as other material from
Russian political and civil organizations, and will be ready to present
evidence, if necessary, that would convince the world community to come
to independent conclusions based on the evidence. Klimov mentioned other organizations which Russia has been working
with, including the Asia Pacific Parliamentary Forum and the EU-Russia
Parliamentary Cooperation Committee, as well as the Parliamentary
Assembly of the Mediterranean, which Russia has recently joined.

On the European Economic Crisis, Financial Bubble:

At the ASEP forum in Rome, Klimov noted that he had heard figures
during the course of discussions which he had found interesting; he had
discovered that "the EU accounts for more than 60% of all social
spending worldwide" despite having a population of only 600 million
people. At the same time, the EU’s contribution to global GDP is only 15
percent. Obviously someone has to pay for the difference. These questions are very worrisome to people who represent countries
which make a much greater contribution to the creation of [global] GDP."

Klimov said that “the fact that the discussion took place in Italy
only made it more relevant, considering that unemployment among the
country’s youth stands at 40 percent today. Imagine such a high
unemployment rate in our country. It would result in a tremendous
outcry, and justifiably so... Against this background, it is
understandable that when such tremendous resources are spent on social
needs, the region becomes attractive to immigrants...and now in the EU
there is no idea about what to do with this issue. On one hand, the
unions attempt to prevent the bar from being lowered; while on the other
hand, their economies haven’t been capable of dealing with the problem
for a long time, and money and other financial instruments are utilized.
All of this affects the world financial system’s [stability], since
this bubble is set to burst sooner or later; similar processes are
occurring in the United States; this is what the discussions [in Milan]
were about.”

Growing International Interest Toward the Eurasian Union and BRICS

Klimov noted that among parliamentary circles and foreign business
communities, interest in the Eurasian Union project and the five BRICS
economies “is greater even than in our own country...Our people seem to
have become accustomed to thinking on the scale of Russia, which of
course is correct, and they have not yet come to understand that the
Eurasian Economic Union is a new supranational entity whose decisions
are binding for participating countries; there are a lot of interesting
processes taking place in this regard. Our international partners seem
to have observed this attentively, together with what is going on in the
BRICS.”

Klimov noted that Russian delegations are asked about developments on
these issues at forums throughout the world, “from Caracas to Colombo,”
and also among Western leaders, “especially its business class,” adding
that “the political class is also interested but tries to hide it.”

Need for and Movement Toward a Multipolar World Order

Klimov noted that Russia “today and in the foreseeable future, will
support a multipolar world, toward which we are presently working with
all our efforts...including through inter-parliamentary dialogues with
our colleagues.” Klimov added that Russia rejects the ideas of national
exceptionalism and of one power deciding for everyone. The Senator said toward the conclusion of his meeting that currently
“the US often just avoids those platforms where they do not have a
dominant position...they have even left the platform organized by the
countries of Latin America, which pushed them out, together with the
Canadians. And if we are to speak about who is isolated, in
inter-parliamentary terms, it’s the United States...Because if you
observe the countries that do not have very close relations with them
–even just the inter-parliamentary dialogue between the EU and the US,
you will see a lot of interesting things in this regard.”

Crisis in Ukraine has sparked even more controversies as Russia
accuses the United States of pushing for regime change in Moscow.
Tension across the globe has also been rising following the country's
aggressive military mobilizations on Ukraine with recent evaluations saying that Russia may now be at par, perhaps even beyond, the nuclear capabilities of the
West. Are Vladimir Putin and his country a rising threat?

Last September 1, 2014, a report from the US State Department claimed that in 40 years and for the first
time following the USSR collapse, Russia achieved strategic nuclear
weapons' parity with the United States. More importantly, Washington
said that Moscow may have regained a status similar to the mid-70′s
Sovient Union. To be exact, the State Department revealed that Russia
now has 528 carriers of strategic nuclear weapons capable of carrying
1,643 warheads. The United States, as per the report, manages 794
vehicles including 1,652 nuclear warheads.

The report considers Russia's weapons advanced than US
primarily because it guarantees parity on warheads with a fewer
strategic nuclear weapons' carrier. The gap may even widen in the future
considering the promise of Russian defense officials to add new
generation missiles to Russia's SNF.

The reportedly growing military power of Russia injects more
tension as its Foreign Minister Sergei Lavrov of Russia attacks the
West's sanctions on the country. According to the minister (via CNN):
"As for the concept behind the use of coercive measures, the West is
making it clear it does not want to try to change the policy of the
Russian Federation ... they want to change the regime -- practically no
one denies this." This reflects the waning ties between the United
States and several European nations with Russia. These countries
condemned Russia's move on Ukraine such as sending troops to the region
to overthrow Ukrainian government forces.

CNN
also reported that Moscow has been vocal about its support to the
rebels in Ukraine even sending aid convoys. However, the region did deny
being militarily involved. Reuters' report, on other hand, demonstrates
new lows in country relations for Russia. In order to pressure Russia
in its involvement with Ukraine, the European Union
and the United States have imposed sanctions on the country. Reuters
quoted Putin: "We understand the fatality of an 'Iron Curtain' for us."

"We will not go down this path in any case and no one will build a wall around us. That is impossible!"

Ukraine has been a source of tension for both Russia and the
United States since the Cold War. Fatalities in the region have reached
4,300 people since chaos erupted around mid-April. Academic director at
the German government's Federal Academy for Security Policy in Berlin
also noted the impact of Russia's move in Ukraine to NATO.

"The rapid mobilization of 20,000 to 40,000 Russian troops at the Ukrainian border scared the hell out of NATO," Bloomberg quoted the director.

Russia's long-range bombers will
conduct regular patrol missions from the Arctic Ocean to the Caribbean
and the Gulf of Mexico, the military said Wednesday, a show of muscle
reflecting tensions with the West over Ukraine. A statement
from Defense Minister Sergei Shoigu comes as NATO has reported a spike
in Russian military flights over the Black, Baltic and North seas as
well as the Atlantic Ocean. It came as NATO's chief commander accused
Moscow of sending new troops and tanks into Ukraine — a claim quickly
rejected by Moscow. Shoigu said Russian long-range bombers will
conduct flights along Russian borders and over the Arctic Ocean. He
added that "in the current situation we have to maintain military
presence in the western Atlantic and eastern Pacific, as well as the
Caribbean and the Gulf of Mexico."

He said that the increasing
pace and duration of flights would require stronger maintenance efforts
and relevant directives have been issued to industries. Russian
nuclear-capable strategic bombers were making regular patrols across
the Atlantic and the Pacific Oceans during Cold War times, but the
post-Soviet money crunch forced the military to cut back. The bomber
patrol flights have resumed under Putin's rule and have become
increasingly frequent in recent years. Earlier
this year, Shoigu said that Russia plans to expand its worldwide
military presence by seeking permission for navy ships to use ports in
Latin America, Asia and elsewhere for replenishing supplies and doing
maintenance. He said the military was conducting talks with Algeria,
Cyprus, Nicaragua, Venezuela, Cuba, Seychelles, Vietnam and Singapore.

Shoigu said Russia was also talking to some of those countries
about allowing long-range bombers to use their air bases for refueling.

Ian
Kearns, director of the European Leadership Network, a London-based
think tank, said the bomber patrols were part of Kremlin's efforts to
make the Russian military "more visible and more assertive in its
actions." The new bomber flights "aren't necessarily presaging a
threat," Kearns said. "They are just part of a general ramping-up of
activities." But he said "the more instances you have of NATO and
Russian forces coming close together, the more chance there is of having
something bad happening, even if it's not intentional."

On
Monday, the European Leadership Network issued a report that found a
sharp rise in Russian-NATO military encounters since the Kremlin's
annexation of Ukraine's Crimean Peninsula in March, including violations
of national airspace, narrowly avoided mid-air collisions, close
encounters at sea, harassment of reconnaissance planes, close
overflights over warships and Russian mock bombing raid missions.

Three of the nearly 40 incidents, the think tank said, carried a
"high probability" of causing casualties or triggering a direct
military confrontation: a narrowly avoided collision between a civilian
airliner and a Russian surveillance plane, the abduction of an Estonian
intelligence officer and a large-scale Swedish hunt for a suspected
Russian submarine that yielded no result. In September, the report
said, Russian strategic bombers in the Labrador Sea off Canada
practiced cruise missile strikes on the U.S. Earlier this year, in May,
the report said, Russian military aircraft approached within 50 miles
(80 kilometers) of the California coast, the closest such Russian
military flight reported since the end of the Cold War. Russia-West
ties have dipped to their lowest point since Cold War times over
Moscow's annexation of Crimea and support for pro-Russian insurgents in
eastern Ukraine. The West and Ukraine have continuously accused Moscow
of fueling the rebellion with troops and weapons — claims Russia has
rejected.

Fighting has continued in the east despite a cease-fire
agreement between Ukraine and the rebels signed in September, and
Ukraine and the West accused Russia recently of sending in new troops
and weapons. U.S. Gen. Philip Breedlove said Wednesday that in the
last two days "we have seen columns of Russian equipment, primarily
Russian tanks, Russian artillery, Russian air defense systems and
Russian combat troops entering into Ukraine."

Breedlove, who spoke in Sofia, Bulgaria, wouldn't say how many
new troops and weapons have moved into Ukraine and wouldn't specify how
the alliance obtained the information. The Russian Defense Ministry
quickly rejected Breedlove's statement as groundless. Breedlove
said that the Russia-Ukraine border is "completely wide open," and
"forces, money, support, supplies, weapons are flowing back and forth
across this border completely at will." "We need to get back to a
situation where this international border is respected," he said.

Russia To Build Unified Network Of Military Facilities On Its Arctic Territories In December

Russia
is planning to set up the headquarters of its Arctic Command at a naval
base used by its Northern Fleet, and the new facility will become
operational on Dec. 1, Russian President Vladimir Putin announced
Monday. The Arctic Command is part of Russia’s plan to form a combined arms
group and construct a unified network of military facilities in the
country’s Arctic territories, by hosting troops, advanced warships and
aircraft to strengthen the protection of its northern borders, Ria
Novosti reported.

“A new strategic command in the Arctic, based at the Northern Fleet,
will become operational on December 1 this year,” Putin reportedly said,
in a meeting with top military commanders on Monday. Russia’s Defense Ministry said that the newly formed Arctic Command,
dubbed “North,” will include the country’s Northern Fleet, two
Arctic-warfare brigades, in addition to its air force and air defense
units by 2017, according to Ria Novosti.

The latest announcement by Russia follows recent media reports that Norwegian scientists had spotted a Russian submarine surface in
the Arctic Circle in October. The submarine was reportedly the
13,700-ton Delta class boat Orenburg, a newly refurbished ballistic
missile bomber. In October, a senior Russian military commander said that the country
would strengthen its military forces with more airfields and radar
stations in the Arctic.

“We are planning to build 13 airfields, an air-ground firing range,
as well as ten radar and vectoring posts,” Lt. Gen. Mikhail Mizintsev,
head of the National Defense Management Center, was quoted as saying at the time, by Ria Novosti. Russia’s Natural Resources Minister Sergei Donskoi also reportedly
said in October that the country could submit another request to the
United Nations, seeking to expand its Arctic borders by 1.2 million
square kilometers (more than 463,322 square miles).

A Russian expert also said that the country’s prospective submission to the U.N. to expand the limits of its Arctic borders is backed by scientific research.
Over the past few years, the Russian government has reportedly been
undertaking several political, economic and military measures to
safeguard the country’s interests in the Arctic. In October 2013, Putin vowed never to "surrender" Russia's Arctic
area. He later ordered the Defense Ministry to take steps to protect
Russia’s interests in the region, Xinhua reported.

Russia’s increasingly assertive – and some say militaristic – foreign
policy hit a little closer to home recently. Russian Defense Minister
Sergei Shoigu announced that the Russian military would soon be
conducting bomber patrols worldwide, including in the Caribbean and the
Gulf of Mexico – the United States’ proverbial backyard. “In the current
situation we have to maintain military presence in the Western Atlantic
and Eastern Pacific as well as the Caribbean and the Gulf of Mexico,”
said Shoigu, apparently in response to accusations from NATO officials
that Russian troops are heading into Ukraine.

Shoigu reportedly added that the flights would be “reconnaissance
missions to monitor foreign powers’ military activities and maritime
communications,” presumably referring to the U.S.

If Shoigu’s announced plans were to materialize, the Russian flights
would constitute the most significant Russian international military
escalation since the Cold War. By some standards, bomber sorties in the
Gulf of Mexico would surpass even Cold War-era tensions, as Russian
forces reportedly did not routinely patrol North America’s southern
flank. “Such a policy is highly reminiscent of Soviet military activity
during the Cold War,” says Laura Linderman, a research fellow with the
Dinu Patriciu Eurasia Center at the Atlantic Council. “This is a
calculated escalation by Moscow to see just how far they can push the
U.S.”

Shoigu’s comments come amid a major increase in Russian airborne
“probing” missions in the Black Sea, the Baltic Sea, the Mediterranean
and throughout European airspace. However, those flights were largely
launched from Russia itself. Even occasional missions skirting U.S.
airspace near Alaska or California can be launched from Russian bases.
Flying patrols to the Gulf of Mexico, to say nothing of the
further-flung Caribbean, would require a constellation of refueling and
maintenance facilities throughout the region to support aircraft making
the approximately 5,500-mile journey from Russia’s frozen East to the
balmy Gulf.

This makes it unlikely that Russia will be able to fly patrols in the
Gulf and Caribbean as announced without first establishing those
facilities, experts say. It is also possible that while several
high-profile missions may indeed go forward, they will be used more as a
demonstration of capability rather than establishing a regular
surveillance route. But either way, it underlines Russian intentions to
boost its presence in the Western Hemisphere and, more broadly, to lay
claim to the return of Russia as a global power.

Lincoln Mitchell, an associate research scholar at the Arnold A.
Saltzman Institute of War and Peace Studies at Columbia University,
supports the view that the Russian plan cannot be ignored despite the
obvious logistical difficulties. “In the last year or so, what seems
unlikely one day with Russia has had a way of happening the next,” says
Mitchell. The leadership “has been very smart about seeing just how far
they can go. You can’t rule it out just because it seems implausible
today.”

Though the Russian bomber sorties, should they ever happen, will
involve aircraft capable of carrying nuclear weapons, the actual
military threat they pose is relatively low. The Russian long-range
bomber of choice, the Tupolev TU-95 “Bear,” is of 1950s vintage and an
easy mark for U.S. air forces – including the hypersophisticated F-22
Raptor and F-35 Lightning II fighters that make up an ever-larger
portion of the U.S. fighter fleets.

The greater danger may be the risk of an incident between Russian and
U.S. planes. A collision between a U.S. spy plane and a Chinese fighter
in 2001 brought relations to deep lows even without the volatile context
that increasingly surrounds U.S.-Russian ties. The ongoing conflict in
Ukraine, in which Russian forces appear to be actively engaged in
supporting separatist groups in the country’s East, has been a major
point of contention between the U.S. and Russia since the conflict began
in earnest in March.

Russia has denied its involvement in Ukraine, saying that any of its
citizens fighting there are only “volunteers.” However, U.S. leaders
reject this claim. According to U.S. Air Force Gen. Philip Breedlove,
the Supreme Allied Commander in Europe, NATO forces have confirmed
“columns of Russian equipment, primarily Russian tanks, Russian
artillery, Russian air defense systems and Russian combat troops
entering into Ukraine.”

In Washington, the response to all this activity and rhetoric has not
been particularly well-defined. “Russia is invading Ukraine, but the
administration will not call it an invasion. Is this a strategy?” asks
Linderman. “As far as I can tell, in the run-up to this situation, the
administration has not shown itself to be sufficiently strategic.”

Instead, it has leaned on a tool kit of sticks and carrots in an effort
to nudge Moscow toward compromise. On one hand, Washington has used
sanctions, aid and military reassurance deployments to pressure Moscow
for its alleged excesses, but it has kept the door open rhetorically for
a figurative “off-ramp” that would lead to de-escalation. “I think
Obama has been one of the cooler heads in Washington,” says Mitchell. He
“is a lame duck who is likely going to be replaced by a more hawkish
president in 2016. In a way, this frees up Obama to do what he wants on
the issue.”

But the threat of Gulf flights appears to show that Moscow is not
interested in reversing course anytime soon. Instead, the Russian
government has signaled its intent to continue pushing unless its claims
to leadership – which its critics consider to be neo-imperial impulses –
over states in its so-called near abroad region are acknowledged and
respected by Western powers. Yet the U.S. and its allies in Europe say
these countries should be free to choose their foreign policy
orientation, which makes the two sides essentially irreconcilable.

However, Mitchell sees the administration’s current approach as
prudent. “We already have superior military power,” he notes. There’s a
difference between Russia doing something the U.S. disapproves of, he
says, “and being an actual threat to Americans – and that’s a
distinction that is ultimately up to the president to make.”

Still, the specter of Russian bombers flying regular patrols along
American shores adds yet another dimension to the increasing rivalry
between Russia and NATO. Though the patrols may not be a direct military
threat to the U.S. mainland, they highlight a growing gap between U.S.
and Russian foreign policies – one that may not be solved for years.

Russia is launching a new national defense facility, which is meant
to monitor threats to national security in peacetime, but would take
control of the entire country in case of war. The new top-security,
fortified facility in Moscow includes several large war rooms, a
brand new supercomputer in the heart of a state-of-the-art data
processing center, underground facilities, secret transport
routes for emergency evacuation and a helicopter pad, which was
deployed for the first time on Nov. 24 on the Moscow River. The
Defense Ministry won’t disclose the price tag for the site, but
it is estimated at the equivalent of several billion
dollars.

The new National Defense Control Center (NDCC) is a major upgrade
on what was previously called the Central Command of the General
Staff, a unit tasked with round-the-clock monitoring of military
threats against Russia, particularly ballistic missile launches,
and deployment of strategic nuclear weapons. It was roughly a
counterpart to the US National Military Command Center, the
Pentagon’s principal command and control site.

The NDCC inherits all those functions, but also has plenty of
extra roles as well. In peacetime, an additional task is to
monitor all of Russia’s important military assets, from hardware
being produced by defense contractors to the state of oil
refineries, to weather conditions and their effect on
transportation routes. And if Russia does get into a war, the center would act as a
major communication hub and a form of wartime government,
delivering reports to the country’s military command and giving
orders to all ministries, state-owned companies and other
organizations, according to the needs of the armed forces.

“The creation of NDCC was one of the biggest military
projects of the past few years. The closest analogy in the past
in terms of functions and tasks was the Commander-in-Chief HQ in
1941-45, which centralized all controls of both the military
machine and the economy of the nation in the interests of the
war,” Lt. General Mikhail Mizintsev, the NDCC chief, told
Lenta.ru in an interview.

The military says the upgrade has been long overdue. The national
security situation may be very fluid in modern times, and instead
of days the leadership may have only an hour to take crucial
military decisions. The center’s job is to offer the Defense
Minister and the President options in case of emergency, which
would be based on facts, figures and accurate projections.

Potentially the biggest part of the upgrade was the creation of
communication and data processing equipment that would give the
military computer power and software needed to factor in hundreds
of parameters in their mathematical models. The Defense Ministry
had to use only domestically-produced hardware due to security
considerations, which limited its options.

According to officials, the result is a very robust computer
network with state-of-art data encryption and multiple backup
sites spread throughout the country, which would keep the center
functional even if its main facility in Moscow is damaged by an
enemy attack or sabotage.

The center employs over 1,000 officers working on a rotating
watch system. Mizintsev said the armed forces selected their best
officer for the posts, many of which are new for the Russian
military and require skills not previously taught to officers on
a regular basis until recently. They have been operating in trial
mode since April. A thoroughly military facility, the NDCC has an unexpected
civilian component to it. Its location in Moscow is close to two
major hospitals, including the Pirogov trauma center. Both
hospitals are quite old and their original designs didn’t provide
for dedicated helicopter pads. The Defense Ministry said the medics can share NDCC’s new pad on
the Moscow River for emergency patient transportation. The pad
can accommodate helicopters weighing up to 15 tons, enough to
land a Mil Mi-8, world’s most-produced transport helicopter, or a
Mil Mi-38, its designated replacement.

Ukraine is the very definition of the word “inevitable” — that which
cannot be avoided. Ukraine is going broke. It may lose more of its
territory. Investors are running for the door, betting that things are
going to get worse. All of this is now unavoidable. The market used to
think the Ukraine crisis would cool down by the December. All bets for
that outcome are now off the table. Ukraine is shrinking, in more ways than one.

On March 16, 2014, Ukraine saw a large chunk of its territory annexed
by Russia. The Crimea peninsula, then an autonomous region of the
country, voted to secede after a perceived anti-Russia government took
over Kiev. Crimea is dominated by ethnic Russians. Now, two regions
continue to keep Ukraine in the news: Luhansk and Donetsk. Leaders
there have decided it is best to become autonomous republics too. Like
Crimea, this may very well be another way of saying goodbye to Kiev, if
not Ukraine altogether.

Even if territorial integrity remains, Ukraine’s finances are
deteriorating. The nation’s currency, the hryvnia, has lost 91.5% of its
value so far this year, falling rapidly after the Central Bank decided
on Nov. 4 to abandon its 12.95 peg to the dollar. The BNY Mellon Ukraine
Index is down 40.18% year-to-date, much of it coming after the Bank’s
decision. It’s panic time for Ukrainian money.

The probability of Ukraine defaulting during the next five years, according to the CDS markets, is now greater than 70%. “Economically, Ukraine is being transmogrified into a failed state,” says Vladimir Signorelli, co-founder and senior international economist at Bretton Woods Research in New Jersey.

Prime Minister Arseniy Yatsenyuk has stuck with his policy of
austerity since taking over the country in February. He has followed the
International Monetary Fund’s prescription of shock therapy policies of
tax increases, devaluation and spending cuts. Monetarily, “Ukraine is
beginning to look like an IMF basket-case from South America or Africa
from the 1970s and 80s,” Signorelli says, adding he expects inflation to
go even higher than the 19.8% levels hit last month.

According to Reuters, one third of Ukraine’s deposits have been
withdrawn from the banking system since Sept. 21, or nearly $6.8
billion. Ukraine’s foreign reserves stand at a mere $12.6 billion as of
October. Not surprisingly, the probability of Ukraine defaulting during
the next five years, according to the credit default swaps market, is
now greater than 70%.

A default scenario for Ukraine,
which was not among the
assumptions in the European Central Bank’s recent stress tests of 130
banks, would create significant market volatility and introduce the
threat of contagion in the E.U. Back in April, European banks owned
nearly $1.4 trillion of loans to Eastern European countries. Loans to
Eastern Europe
comprise approximately 35% of total foreign loans by Austrian banks,
27% by Italian banks, and 18% to 20% by Greek and Portuguese banks.

“A Ukraine default scenario could become analogous to the Mexican
Crisis in 1982. Similar to the way Fed Chairman Paul Volcker was able to
monetize Mexico’s debt in 1982, thereby quickly reflating the dollar
and taking off the table a sovereign default by the Mexican government,
we believe there is the potential for a similar monetization by the ECB
should Ukraine teeter on the brink of default,” Signorelli says.

Political map of Ukraine,
highlighting the Crimean peninsula in pink. The four provinces along the
Russian border are in favor of becoming autonomous zones, separate from
Kiev. That might be the best case scenario. The worst case will be
those four provinces being annexed one-by-one by the Russian Federation
next door.

The Map

Crimea is now part of the Russian map. A number of regions along the
eastern Ukraine border, starting with Luhansk and Donetsk, are on the
verge of following in Crimea’s footsteps.

Last week, the top U.S. commander for NATO said Russia was
effectively working to re-draw the Ukrainian border. U.S. Air Force
General Philip Breedlove said on Nov. 3 that “Hybrid war is what we are
coming to call what Russia has done clearly in Crimea and in eastern
Ukraine. I’m concerned that the conditions are there that could create a
frozen conflict,” one that ultimately sees more regions either become
autonomous from Kiev, with greater allegiances to Russia, or building on
a civil war that will eventually lead to a secession.

Over 4,000 people have been killed in military skirmishes between
pro-Russia fighters and the Ukrainian military. Russia denies funding
the militants, though Washington
insists on evidence of Russian troop movement heading into Ukraine.
Russia usually says the vehicles are carrying humanitarian aid.

One thing is certain: Russia, Ukraine and the E.U. cannot agree on
how to stop fighting. The Sept 5 cease-fire agreement between Ukrainian
president Petro Poroshenko and Vladimir Putin is basically dead. Instead
of broader negotiations, escalation appears to be at hand with
separatists unwilling to recognize Kiev. Ukraine president Petro Poroshenko faces a
dilemma. He agreed with Washington, Brussels and Moscow that sending in
more troops to Eastern Ukraine was a bad idea. But he’s doing it anyway
as separatists continue to spark civil unrest in the Donbas
region.

On Nov. 4, Poroshenko ordered more troops to the eastern cities
despite the fact that the U.S., E.U. and Russia have agreed that the
disposition of the eastern provinces cannot be resolved on the
battlefield. Meanwhile, Poroshenko has also suspended all budget
subsidies earmarked for the territories, basically starving them of a
federal lifeline. Yatsenyuk announced this week that $2.6 billion in
state support, including benefits and pension payments to retirees,
would be withheld from Donetsk and Luhansk until the fighting ceases.
The move is unlikely to pacify those already against the government.

A partition
of the country is becoming more likely. If so, it could
stretch from Luhansk in the northeast all the way down to the Kherson
province in the southeast, on the Crimean border. Ukraine’s problems may
be bad for European banks and frontier market bond holders like
Templeton. It is even worse for Russia.

The Ukrainian crisis has led to a direct weakening of the Russian
ruble — down 41% year to date. Sanctions on Russian banks and energy
companies like Gazprom became active on June 28, hurting business
sentiment and sending the Market Vectors Russia (RSX) exchange traded
fund down 21.09%.

“We want to see this crisis end, too, ” Putin told a gathering of
more than 1,500 investors and executives during last month’s Russia
Calling! investor conference in Moscow. “ We consider the Ukrainians
close family. We share cultural and religious history and want to remain
a close ally to Ukraine,” he said.

Even worse for Russia has been the coincident decline in oil prices,
which appears to be reflecting the collision of increased supply and
falling demand in China and Europe. Falling oil prices has added another
risk to the Russian economy, which is highly reliant on oil for public
finances. Meanwhile, an escalation of the Ukraine crisis is more inevitable
than not. This will also hurt Russian investor, but will surely push
Ukraine’s finances to the brink and possibly redraw the Ukrainian map
longer term.

As the world observes the continuing clash between Russia and the
West in Ukraine, tensions are rising further south, in the former Soviet
Republic of Georgia. Like in Ukraine, rivalries among political
factions and ethnic groups in Georgia dangerously intersect with the
broader Russian and Western struggle for influence in the former Soviet
space. Without the dialogue necessary for peace, a serious conflict
could erupt here as well, with very negative implications for regional
and international security. The situation can’t be ignored.

Located at a strategic crossroads between East and West, Georgia has
been a major theater of contention for many years. A country rich in
history and hospitality, it is viewed by Washington as a conduit to
Central Asian energy and as a means of expanding influence into the
former Soviet Union. Moscow views it as an important component of its
traditional security structure, enhanced by history and the shared ties
of Orthodox Christianity.

In 2003, the Washington-backed Rose Revolution in Tbilisi swept
Georgian President and former Soviet foreign minister Eduard
Shevardnadze out of power, and brought in the American-educated,
staunchly pro-Western Mikheil Saakashvili. Saakashvili’s government
immediately sought to join the European Union and NATO and engaged in
provocative anti-Russian rhetoric. Relations with Moscow quickly
deteriorated. The situation reached the boiling point in August 2008,
when Saakashvili launched a military assault on the breakaway region of
South Ossetia, which was protected by Russian peacekeepers. The attack
precipitated a five-day war in which Russia expelled Georgian forces
from South Ossetia and another breakaway region, Abkhazia, and then
formally recognized both as independent states. In response, Saakashvili
severed ties with Moscow. Six years later, Russo-Georgian relations
remain at a standstill.

In many respects, the 2008 conflict seemed to be a prelude to the
developments that are now unfolding in Ukraine. In both conflicts, NATO
expansion and attempts by Washington to strengthen US influence in the
region played key roles. In both cases, pro-Western governments—overtly
antagonistic toward Moscow—did much to fan the flames. And in both
cases, Moscow stood firm in protecting its interests.

In the years following the 2008 conflict, Saakashvili’s regime
gradually collapsed. In October 2012 his party, the United National
Movement (UNM), lost to the Georgian Dream coalition headed by the
charismatic Imeretian billionaire Bidzina Ivanishvili. Ivanishvili’s
victory seemed to herald a new era for Georgia. It was to be one
informed more by balanced pragmatism than by Saakashvili’s penchant for
pro-Western bluster.

As a leader, Ivanishvili was neither entirely pro-Russian nor
pro-Western. He understood the benefits of a relationship with Moscow
and vowed to repair relations with the hope of fully restoring
diplomatic ties. He also sought reconciliation with Abkhazia and South
Ossetia and advocated for reopening the Abkhaz railway, which linked
Armenia to Russia during the Soviet era. He kept Georgia’s NATO and EU
ambitions on the table, likely as negotiating chips with Moscow to help
ensure a peace deal with the Abkhaz and Ossetes. At the same time, he
openly considered the idea of joining the Moscow-backed Eurasian Union.

Despite Ivanishvili’s reformist stance and his strategic and
diplomatic posturing, he was limited in his ability to fundamentally
change the situation because Saakashvili remained the nominal head of
state in a power-sharing arrangement. After Saakashvili’s final defeat
in the 2013 presidential election and Ivanishvili’s decision to retire
from politics, they were replaced by two Ivanishvili associates: the
philosopher and bon vivant Giorgi Margvelashvili as president and Irakli
Garibashvili as prime minister, a mere 31 years old at the time of his
appointment. With Saakashvili out of office, a new hope emerged that
Russo-Georgian relations would be finally restored. The high point in
this growing thaw occurred during the 2014 Winter Olympics in Sochi,
when Russian President Vladimir Putin personally invited Margvelashvili
to a one-on-one meeting.

However, when all eyes turned toward the Maidan, the meeting was put
on hold indefinitely. As the Ukraine crisis intensified, the United
States and the European Union stepped up their efforts to enhance their
geopolitical position in the former Soviet space. US officials
emphasized the importance of a Georgian future in NATO and full US
support for Georgia’s territorial integrity. Meanwhile, the EU moved up
the date of the signing of its Association Agreement with Tbilisi from
August to June, granted more money to Tbilisi and persuaded the
pro-Moscow leader of the Georgian Orthodox Church to support EU
membership. In the absence of full diplomatic relations with Tbilisi,
Russia was powerless to counteract any of these moves.

There were domestic concerns too. Within the ruling Georgian Dream
coalition, there are divisions between pragmatists (like Prime Minister
Garibashvili) and hawks (like Parliament Speaker Davit Usupashvili) over
how to pursue relations with Moscow. Even within the pragmatist camp,
disagreements have emerged between Garibashvili and President
Margvelashvili. Points of contention range from who should meet with
Putin to who should sign the Association Agreement. The delineation
between the power of the president and that of the prime minister in
Georgia’s developing political system remains a subject of debate, and
has been at the center of the ongoing Margvelashvili-Garibashvili feud.
Until recently, both Margvelashvili and Garibashvili were planning to
attend the UN Climate Summit, which would have made Georgia the only
country represented by two heads of state. In the end, Margvelashvili
canceled his participation at the event.

It is noteworthy that Ivanishvili has criticized Margvelashvili but
has been largely silent amid the ongoing Ukraine crisis. In March, he
only briefly touched on Ukraine when he predicted that Russia will “not
concede regarding Crimea.” In an interview published in the weekly Kviris Palitra
on September 15, he commented further. “God forbid the continuation of
what is now going on in Ukraine,” he said. “Of course, it is horrible
what is happening in Ukraine. We, all of us, and I personally support
our neighboring country, Ukraine.” He also hoped “very much that
everything will be settled in the near future” and for “peace to be
established there soon.”

Contrast this to former President Saakashvili who has been a vocal
supporter of Kiev and even served as an unofficial advisor to the
post-Maidan Ukrainian government. The former Georgian leader’s
involvement with Kiev led to protests from the Georgian government as
well as the government of breakaway Abkhazia. In Georgia’s southern
neighbor, Armenia, it was lampooned on ArmComedy, the Armenian version of The Daily Show.
Speculation in the Caucasus about an official Saakashvili advisorship
increased after the election of Petro Poroshenko. On May 26, Russian
Foreign Minister Sergei Lavrov criticized a potential Saakashvili
appointment, while Georgian Prime Minister Garibashvili offered some
“friendly advice” to Kiev: “keep Saakashvili at bay.” In the end,
Poroshenko opted to appoint Kakha Bendukidze, a Saakashvili political
ally, instead.

Today, Saakashvili is in self-imposed exile in Brooklyn, New York and
with good reason. He is a wanted man in Georgia. Initially targeted for
questioning with regard to the murder of former Prime Minister Zurab
Zhvania, he is now the subject of an investigation into alleged abuses
and excesses of power during his presidency. Tbilisi’s prosecutor has
issued a warrant for his arrest, and efforts are now under way to seize
his property, freeze his assets and issue an international arrest
warrant via Interpol. In addition, Russia has spoken of a possible
arrest warrant for Saakashvili’s attacks against civilians in the 2008
war in South Ossetia.

In response, Saakashvili laughed off the charges and promised to
“arrive in Georgia” not as a criminal but as a hero, threatening to
bring his own Maidan to Tbilisi. The Georgian government noted these
declarations with concern. In April, Tbilisi’s Interior Ministry claimed
that Saakashvili and the UNM were planning to “destabilize” Georgia
with the aim of “overthrowing state institutions.” Interior Minister
Aleksandr Tchikaidze also claimed that UNM members purchased car tires
to stage Maidan-style burning barricades. In his interview, Ivanishvili
warned that Saakashvili and the UNM “want Georgia to burn in flames,
because they are no longer in power.” He maintained that “God saved us
that they are no longer in power.”

Significantly,
on September 10, the Interior Ministry raised these concerns for a
second time. Prime Minister Garibashvili commented on the initial
reports in April, stating that “no one will dare to stir destabilization
in this country while we are in the government; if anyone has any such
desire or attempt, they will be strictly punished.” He responded
similarly to the second report in September. The possibility of
widespread civil unrest is particularly troubling to Georgian officials,
as the memory of the civil war in Georgia during the 1990s is still
fresh in many people’s minds.

Yet, even though Saakashvili’s popularity is marginal in Georgia, and
though his regime undoubtedly committed many abuses, the criminal
charges from Tbilisi against him still prompted a barrage of criticism
from the West. US senators from both parties expressed “extreme
disappointment” and “concern” with the charges against Saakashvili,
while EU officials and members of the Obama administration accused
Tbilisi of “selective justice,” backsliding on its democratic
obligations, and “deviating from the European path.” Georgia reacted
with surprise to these accusations from its Western “partners.”
Responding to Western criticism of the initial charges against
Saakashvili, Prime Minister Garibashvili retorted that “no one should
demand from us to be more Catholic than the Pope.”

In response to further criticism from the Swedish Foreign Minister
Carl Bildt and the Lithuanian Foreign Minister Linas Linkevičius,
Garibashvili remarked that their reactions were not surprising as they
represented members of a “kind of a club of Saakashvili’s friends.
Regrettably, they were not aware of those terrible things that had been
happening in Georgia for years.” On Twitter, Bildt replied that “if the
Georgian Prime Minister does not want to listen to the best friends of
his country in EU that’s his choice.”

Moscow has expressed concern about other recent developments.
Georgia’s signing of the EU Association Agreement in June led to the
suspension of the Russo-Georgian Free Trade Agreement, which had been in
place since 1994. Bilateral trade between Russia and Georgia increased
by 35 percent in the first few months of 2014, largely due to the
restoration of trade relations under Ivanishvili. The Association
Agreement threatens these dynamic new trade relations between both
countries.

Moving toward the EU and potentially joining it carries even more
serious economic risks for Georgia. As the Eurozone struggles to recover
from a severe currency crisis, it is unlikely to deliver on the promise
of a major economic transformation for Georgia. The EU’s newest Eastern
European members (Romania, Bulgaria and Croatia) have already stopped
converging with their Western European counterparts. Citizens of several
other Eastern European (and increasingly Southern European) countries
have emigrated west, with no return in sight. For a country like
Georgia, with a GDP per capita of about $6,000 and continued poverty and
unemployment in the countryside, membership in the EU would not bring
any dramatic changes and may, in the long term, serve to turn the
population against the political elite.

A far greater concern to Moscow is Georgia’s continued pursuit of its
NATO ambitions. At the height of the Ukraine crisis, Georgia’s hawks
hoped that NATO would grant Tbilisi a Membership Action Plan (MAP) at
the NATO summit in Wales in September. Despite signs that Washington
might support such a move, Germany’s Angela Merkel quickly shot it down
before it even reached serious discussion. Instead, Tbilisi was granted a
NATO package that would, among other things, establish a NATO training
facility in Georgia and give NATO the right to “occasionally” hold
military exercises in the Caucasus country. Moscow was less than
thrilled, though the denial of a MAP must have been a relief. Still,
Putin took precautionary measures. In the run-up to the NATO summit,
Russia began the process of forging a defensive military alliance with
Abkhazia and South Ossetia. After the NATO summit, US Secretary of
Defense Chuck Hagel visited Tbilisi and pledged military aid to Georgia.
This increased militarization of the Caucasus region is a troubling
development and could have negative implications for broader European
and the Middle Eastern regional security.

So, what is to be done? Georgia and Russia have to come to the table
and start talking. Even without formal diplomatic relations, the leaders
of both countries must meet. Putin’s invitation to Georgia’s
Margvelashvili remains open. A meeting like this could set the tone for
warmer relations, including a possible resolution of the longstanding
Abkhaz and South Ossetian issues along federal or confederal lines.

Meanwhile, the West should recognize that efforts to expand NATO and
the EU are not helpful to the pursuit of peace and should instead
encourage all parties involved to settle their differences peacefully,
amicably and naturally. Russia, Georgia, Abkhazia and South Ossetia
could work with the West as partners toward greater economic and
political integration. The vision of a united Europe without walls,
stretching from Lisbon to Vladivostok, might then be realized. It could
also lead toward a common security structure to address global problems,
such as nuclear nonproliferation, limited water resources, world
hunger, threatening diseases and common threats like ISIS.

The alternative to this option is the continued expansion of NATO
into the post-Soviet space and the realization of Russia’s fear that
NATO bases are creeping closer to its border. The ultimate nightmare
would be to see these divisions entrenched and militarized with the
presence of nuclear weapons. Suddenly, there would be a new cold war
dividing line running directly through the volatile Caucasus. If the
West persists with expanding into this region, it could very well make
Georgia the next Ukraine.

Azerbaijan is a key American ally. The only country to border both Iran and
Russia, it has angered both
with its consistent efforts to orient itself to the United States.
While many Americans point out Azerbaijan’s democratic deficit,
President Ilham Aliyev’s strategy of building up the middle class first
has merit: To force reforms prior to establishing a strong, stable
middle class would play into the hands of both Iran and Russia, neither
of which care an iota about democracy.

As much as Azerbaijan orients itself
toward the West, neighboring Armenia has planted itself firmly in
Russia’s orbit. Indeed, Armenians are perhaps the only people who would
willingly vote to embrace Russia rather than the West even if Russia did
not lift a finger to influence or force them. Culturally, Russians and
Armenians have much in common, and Russia remains Armenia’s chief
patron.

The conflict between Armenia and Azerbaijan over Nagorno-Karabakh
erupted into hot conflict almost immediately upon the dissolution of
the Soviet Union and the regaining of independence by both states. In
December 1991, Armenians living in Nagorno-Karabakh declared their own
republic, one of those fictional states that the Kremlin has helped prop
up with increasing frequency—for example, Transnistria in Moldova,
Abkhazia and South Ossetia in Georgia, and more recently Crimea and
Donetsk in the Ukraine.

Visiting Georgetown University Professor Brenda Shaffer is right when she writes in the Wall Street
Journal that
“Freezing lawless regions invites conflicts.” Nagorno-Karabakh has
become a center for money laundering, weapons trafficking, and general
instability. In sum, it has become the typical Putin proxy.

With the West distracted by events in Iraq, it seems Armenian forces
in Nagorno-Karabakh sought to make their move against a pro-Western ally
which has moved to become an energy hub outside Russia’s orbit. Clashes began last week, and have escalated over subsequent days. When it comes to the conflict between Azerbaijan and Armenia, there’s
a tendency by American policymakers to engage in moral equivalence or
simply to seek quiet, regardless of principle. This is wrong on four
counts:

First, while Western policymakers see diplomacy as a means to
conflict resolution, Russian Present Putin sees international relations
as a zero-sum game in which for Russia and its client states to win, the
United States and its allies must lose.

Second, whatever the emotional commitment many in the Armenian
Diaspora in the United States have toward Armenia and their desire to
seek acknowledgement for the events of a century ago, the fact of the
matter is that the Armenian government has repeatedly undercut U.S. interests, even going so far as ship Iranian weaponry to be used to kill American soldiers in Iraq.

Third, it’s time the White House recognize that friendship and
alliance go two ways. We cannot expect Azerbaijan to so continuously
align itself with the United States and promote American interests if we
turn our back on its friendship in its hour of need.

And
fourth, there is no longer any excuse to not see Putin for what he is. No more Bush-era soul gazing, or Obama-era reset.
That Bush and Obama hardly reacted when Russian forces invaded Georgia
surely contributed to Putin’s willingness to invade Ukraine. That Obama
fiddled and German Chancellor Angela Merkel sought to appease
in the aftermath of that crisis only encouraged Putin to move once
again to destabilize the South Caucasus, and its most consistent
pro-Western republic. If the United States does not stand up for
Azerbaijan, then Putin will understand that we are neither serious about
freedom or liberty, friendship or alliance. In such a case, beware
Kazakhstan, Estonia, Latvia, Lithuania, and even Poland.

Peeling away former Soviet republics
from their U.S. and European allies is getting easier for Russia
after its show of force in Ukraine. Azerbaijan is changing tack after months of steering clear
of the showdown 1,500 kilometers (900 miles) away. First Deputy
Premier Yaqub Eyyubov broke the silence in September, calling
Russia his country’s “closest, most fraternal” ally. As a sign
of the warming ties, Russian warships last month docked at in
the capital, Baku, for the first time in more than a year. The nation, which provides the only westward route for
central Asian oil bypassing Russia, has grown alarmed that
Ukraine was left to fend for itself as President Vladimir Putin
had his way in Europe’s biggest crisis since the Iron Curtain
fell 25 years ago. That was a “very bad” signal, according to
Elnur Soltanov, head of the Caspian Center for Energy and
Environment, a research group focused on foreign policy in Baku. “It told everybody who is the real boss in the region, who
is the real hegemon,” he said. “Ukraine is the biggest jewel
among the post-Soviet states and if Russia comes in broad
daylight and occupies Ukraine and the Western world shows this
limited reaction -- it tells us that if something goes wrong
with Russia, we shouldn’t trust anybody to come and save us.”

Oil Effect

As Azerbaijan redraws its foreign policy, its $74 billion
economy is being buffeted by falling crude output and an oil-market selloff. Gross domestic product expanded 2.8 percent in
the January-October period, slowing from 5.7 percent a year
earlier. Hydrocarbons, which account for 45 percent of GDP, make
up more than 90 percent of total Azeri exports, up from 60
percent in the late 1990s, according to the International
Monetary Fund. The Caspian Sea country is backtracking on its two-decade
drive to forge closer ties with the U.S. and Europe as tensions
escalate with Russian ally Armenia over the breakaway region of
Nagorno-Karabakh. The government has also come under greater
scrutiny for its commitment to media freedoms and human rights. Azerbaijan last week shot down what it said was an Armenian
helicopter that violated its airspace, an attack that threatens
to escalate the conflict. More than 20 troops were killed in
August as the skirmishes turned the deadliest in 20 years. With Russian troops already stationed in neighboring
Georgia and Armenia, leaders in the nation of 9.6 million people
are concerned about leaving the country’s other flanks exposed
after seeing the failed efforts to counter Putin’s actions in
Ukraine.

‘Closer Relationship’

President Ilham Aliyev has visited Putin twice in the past
three months and has recently hosted a range of senior officials
from Moscow. Along with Turkey and Israel, Russia is among the biggest
suppliers of weapons to Azerbaijan, selling it military hardware
including T-90 battle tanks. Speaking at a meeting with Putin
last year, Aliyev said Azeri arms trade with Russia was worth $4
billion. The government in Baku plans to increase defense
spending by 27 percent next year. “We definitely see a closer relationship between Baku and
Moscow in the past year,” said Thomas de Waal, senior associate
at the Russia and Eurasia program of Carnegie Endowment for
International Peace. “The Azerbaijani elite is seeking an equal
relationship with both Russia and the West, while retaining its
own economic and political independence.” Azerbaijan’s shift toward Russia is also straining
relations with the U.S. and Europe.

Obama, OSCE

U.S. President Barack Obama in September singled out
Azerbaijan as a country where “laws make it incredibly
difficult for NGOs even to operate.” The Organization for
Security and Cooperation in Europe this month urged the
government to end its “ongoing and increasing number of
repressive actions against independent media and advocates of
freedom of expression,” according to a statement. After winning independence 23 years ago, Azerbaijan has
developed energy and security ties with the U.S. and the
European Union. In partnership with oil companies including BP
Plc (BP/), Statoil ASA (STL) and Exxon Mobil Corp. (XOM), the Caspian Sea nation
built the Baku-Tbilisi-Ceyhan pipeline, which ships Asian oil to
Europe bypassing Russia. The country also sent troops to fight alongside U.S. forces
in Kosovo, Iraq and Afghanistan. NATO relies on Azerbaijan for a
third of non-lethal shipments to Afghanistan. It also joined GUAM, a U.S.-backed alliance with Georgia,
Ukraine and Moldova. All bar Azerbaijan tied their future to the
European Union in June by signing free-trade agreements with the
28-nation bloc. Azerbaijan rejected such an offer.

Separatist Challenges

Like the three other members of the group, Azerbaijan has
struggled to regain control over a breakaway region. The message
is that confrontation with Russia by Georgia and Moldova
worsened separatist challenges, as it did in Ukraine said Rasim
Musabayov, a member of the international relations committee in
Azerbaijan’s parliament. Azerbaijan is locked in a territorial dispute with Armenia
over Nagorno-Karabakh, a conflict that erupted after the Soviet
breakup in 1991. Although major hostilities ended with a Russia-brokered
cease-fire in 1994, no peace agreement has been signed. Armenia
hosts the only Russian military base in the region and gets
Russian weapons at discounted prices. “Azerbaijan has drawn lessons from what has happened to
Georgia, Moldova and Ukraine,” Musabayov said. “Azerbaijan
realizes that it can’t get Nagorno-Karabakh resolved without
Russia’s involvement."

The US Is On A Collision Course With An 'Absolutely Indispensable' Ally

The
US and Turkey are headed for a showdown over Syria, as evidence mounts
that Ankara is enabling groups that Washington is actively bombing.
Discord between the two allies is now more public than ever following a
new report by Dr. Jonathan Schanzer and Merve Tahiroglu of the
Foundation for Defense of Democracies. "Bordering on Terrorism: Turkey’s
Syria Policy and the Rise of the Islamic State" details Turkey's
apparent willingness to allow extremists — including militants from the
Islamic State (aka IS, ISIS, or ISIL) — and their enablers to thrive on
the 565-mile border with Syria in an attempt to secure the downfall of
Syrian dictator Bashar Assad. "The IS crisis has put Turkey and the US
on a collision course," the report says. "Turkey refuses to allow the
coalition to launch military strikes from its soil. Its military also
merely looked on while IS besieged the Kurdish town of Kobani, just
across its border. Turkey negotiated directly with IS in the summer of
2013 to release 49 Turks held by the terrorist group. In return, Ankara
reportedly secured the release of 180 IS fighters, many of whom returned
to the battlefield.

"Meanwhile,
the border continues to serve as a transit point for the illegal sale
of oil, the transfer of weapons, and the flow of foreign fighters.
Inside Turkey, IS has also established cells for recruiting militants
and other logistical operations. All of this has raised questions about
Turkey’s value as an American ally, and its place in the NATO alliance."

Schanzer,
a former counterterrorism analyst for the US Treasury Department, told
Business Insider that Ankara was "like that guy at the casino who keeps
doubling down on a bad bet. Each time the policy has failed, Turkey
appears to have decided to go back and do it again, but with higher
stakes." Throughout the Syrian civil war, Turkey's southern border has served as a transit point for cheap oil, weapons, foreign fighters, and pillaged antiquities.
As the conflict progressed, the fighters taking advantage of Ankara's
lax border policies were more and more radical. "What began with
scattered opposition forces exploiting the border became something that
was really focused on the Muslim Brotherhood, which then became
something that was utilized by [Salafist rebel group] Ahrar al Sham,
which was then utilized by [al-Qaeda affiliate] The Nusra Front, which
is now utilized by ISIS," Schanzer told Business Insider. He added that given various reports of jihadi financiers sitting in hotels on the border between Syria and Turkey, "it is impossible that [Turkey's intelligence agency] MIT is not aware" of what's going on. The financiers "are doling out cash to those who come back with
videos of attacks, proof of what they've done against the Assad regime
or other enemies," said Schanzer, who previously detailed Turkey's terrorism finance problem to Business Insider. Those videos are then used as propaganda to raise more money for funding fighters.

America's Role

The
report notes that policy of the administration of US President Barack
Obama regarding Syria may have indirectly instigated Turkey's dangerous
policy. After supporting Turkey's cause of ousting Assad, Washington
didn't follow up with significant support to the moderate opposition
while Assad dropped Scud missiles and barrel bombs on playgrounds and
bakeries. Obama then balked at enforcing his "red line" after Assad's
forces killed an estimated 1,400 people in four hours by firing rockets
filled with nerve gas on rebel-held territory near the capital. "I was
in Turkey during the Ghouta attacks, and [Turkish officials] were
incredulous," Schanzer said. "They believed that the United States was
squarely behind [Turkish President Recep Tayyip] Erdogan, not only just
in terms of steering Syria into soft landing, but also that it would
back up its words with deeds and take action in light of an ongoing
slaughter. "So I think in a sense once it became clear that the US was
not going to be holding to its word, there was a sense among the Turks
that they had to do this themselves."

ISIS And Blowback

"Turkey
does not have a conflict with ISIS, doesn't want a conflict with ISIS,
and ISIS is benefiting from [Turkey's] border policies," Schanzer said.
"Beyond that it gets a lot more fuzzy, but the point is that the Turks
are not being forthcoming about this relationship." He added that
despite no evidence that Turkey was actively working with ISIS, "it
cannot be denied that Turkey is helping to facilitate the activities of a
terrorist organization that has killed Americans and is destabilizing
the region." Furthermore, ISIS is gaining a following in the country.
The report cites an email from Turkey-based BuzzFeed reporter Mike
Giglio that highlighted his concern about the "level of ISIS support
among the 1-million-plus Syrians living in Turkey. I don't see how they
can successfully weed out ISIS supporters from among these refugees."

Schanzer
said that as the suspected presence of ISIS inside Turkey increased,
and with it support inside Turkey for ISIS and other extremist groups,
it becomes that much more difficult for Turkey to do anything. "They've
inadvertently created a mechanism that can yield blowback for them that
could be extremely painful," Schanzer said. "You have a lot of people
now that are invested in the business of extremism in Turkey. If you
start to challenge that, it raises significant questions of whether" the
militants, their benefactors, and other war profiteers would tolerate
the crackdown

Impossible To Maintain

Tensions
between Ankara and Washington won't dissipate "so long as Turkey tries
to remain neutral with regard to ISIS while all of these things are
happening on its border," according to Schanzer. Consequently, the
report argues, Washington must find a way to work with Turkey. Outgoing
Defense Secretary Chuck Hagel described Turkey as "absolutely
indispensable" to the ISIS fight. Turkey would need to shut down the
border, wrap up known nodes of Nusra and ISIS supporters, remove ISIS
recruitment cells, and dismantle ISIS logistical operations inside the
country. (Schanzer noted that the US or NATO could assist.)

"A
lot of this is going to come down to the will of Ankara right now,"
Schanzer said, adding that a lack of cooperation could result in
Treasury Department sanctions against "individuals who are taking an
active role in these illicit pipelines" on the Turkish side of the
border. "After that, I think we do begin to question whether security
or intelligence cooperation can continue when there isn't an honest give
and take with what's happened," Schanzer added. The report concludes
that Ankara must understand that "while America's Syria policy may have
been feckless, its border policy has been reckless." And the
repercussions of doubling down even further would jeopardize relations
with a crucial ally. "No one wants to scuttle this relationship. But I do think that as
more and more of this comes to light, it becomes ... essentially
impossible to maintain the status quo," Schanzer said. "If we've decided
that ISIS is an enemy worth defeating, it becomes impossible to
maintain the relationship as it is."

Yves here. This article is an important sanity check on the impact of
the current oil price war on Russia. We’ve seen similarly skewed
conventional wisdom on the Saudis: “No, they can’t make it on a fiscal
budget basis at below $90 a barrel,” completely ignoring the fact that
the Saudis clearly believe it is in their long-term interest to suffer
some costs to inflict pain on some of their enemies, and render some (a
lot) of shale oil and alternative energy development uneconomical, which
increases their ability to extract more in the long term from their oil
asset.

By Colin Chilcoat, a writer at OilPrice. Originally published at OilPrice

After a frosty reception at the G20 summit in Australia this week,
Russian President Vladimir Putin required some much needed rest, at
least according to the official explanation given for his conspicuously
early departure from the proceedings. All things considered it could
have been a lot worse. Russia finds itself in familiar territory after a
controversial half-year, highlighted by the bloody and still unresolved
situation in Ukraine. Nonetheless, the prospect of further sanctions
looms low and Russia’s stores of oil and gas remain high.

Shortsighted? Maybe, but Russia has proven before – the 2008
financial crisis for example– that it can ride its resource rents
through a prolonged economic slump. Higher oil price volatility and
sanctions separate the current downturn from that of 2008, but Russia’s
economic fundamentals remain the same – bolstered by low government debt and a large amount of foreign reserves. Moreover, Western involvement in Russian oil and gas plays is more pronounced than ever.

Economic diversification has not come easy for Russia, arguably for a
simple, but effective reason; oil and gas are a source of tremendous
wealth for the country. However, the dire straits of the 2008 global
crisis illustrated the importance of financial diversification. Since
then, Russian state-owned oil and gas giants Rosneft and Gazprom have
increasingly allowed Western majors like BP, Eni, Exxon, Shell, Statoil,
and Total access to some of Russia’s underdeveloped, but prized
projects. Western companies have an estimated
$35 billion tied up in Russian oil with hundreds of billions more
planned and service providers Halliburton and Schlumberger each derive
approximately five percent of their global sales from the Russian
market.

The Western majors remain committed
to their extra-national ventures and these powerful relationships
ultimately limit the sanctions’ scope. Still, with their cooperation put
on hold, Russia has been forced to look elsewhere, and increasingly
within. Rosneft is set to announce
new Arctic partners by the end of the year, a role formerly dominated
by Exxon. China appears a likely suitor as the two countries have
already embarked on a promising oil partnership in Russia’s Far East in addition to the highly publicized long-term gas deals. Domestically, Rosneft and Gazprom have strengthened their alliance and Putin has approved the creation of a state-owned oil services company.

The learning curve will likely be steep, but early successes have bred high hopes and oil production is not projected to contract. Gazprom Neft just completed
its third delivery from their Prirazlomnoye project, the world’s first
stationary Arctic platform. Shipments from the promising field have now
exceeded 1,400,000 barrels on the year. Onshore, homegrown technology and execution has already yielded huge results in East Siberia, which looks to overtake West Siberia as Russia’s primary producing region in the near future.

The picture is incomplete without a discussion of price, and oil’s
sinking value – a combination of low demand and increasing supply, US
shale included – spells trouble for a number of major players, Russia
among them. The breakeven price, or the production cost per barrel, is
the central figure here however, and in an international game of ‘how
low can you go’, OPEC is in the driver’s seat.

Still, the lower prices – Brent crude has averaged
$81 per barrel thus far in November – are in no party’s best interest
and OPEC will do their best to keep prices high while defending their
market share. The cartel’s upcoming meeting in Vienna on the 27th will
go a long way in determining the future trajectory of oil prices. The
global supply glut will be the focus, but theories surrounding both US
and Saudi collusion and conflict give doubt to any plan for unified production cuts.

Business as usual in Vienna would be a welcome sight for Russia, who
would see a decline in the United States’ ability to define geopolitical
events in the Eastern Hemisphere. The truth is, the US can’t win any
volume or price-based game of brinkmanship with the traditional
producing states, Russia included. Shale plays in both Russia and the US
will soon be priced out with continued slippage. Unlike the States
however, a majority of Russia’s production comes from cheaper, though
declining, fields in West Siberia. The International Energy Agency
already predicts a 10 percent decline in US shale investment in 2015.

Whether or not that’s enough to stunt global supply remains to be
seen. Shaky situations in Iraq and Libya could just as easily remedy
pricing woes overnight. What doesn’t kill you doesn’t always make you
stronger, but Russia can survive a price war.

Russia seeks for more independent economic
development and has proved its national strength amid Western sanctions,
President Vladimir Putin said Thursday

URGING ECONOMIC SELF-DEVELOPMENT

Russia depends on itself for economic development, remains open to
world investments and is not interested in arm races, Putin said in his
annual state of the nation address to the Federal Assembly. Western sanctions encourage Russia to attain more economic
efficiency, he said, adding the government should overcome disorganized
administration, irresponsibility and bureaucracy, which are "direct
threats to our security."

Russian economy should get out of the trap of zero growth rate and
reach an above-world-average development rate in the coming three to
four years, so as to increase its share in the global economy and
therefore strengthen economic independence, Putin said in the Kremlin
Palace. The government is tasked with solving the problem of high inflation
and ensuring economic growth at the same time, as well as reversing the
depreciation of the Russian ruble, Putin added.

Inflation
rate should be brought down below 4 percent, while annual
labor productivity should be no less than 5 percent, according to Putin.
He added that the Central Bank and other relevant departments have
been asked to take harsh and coordinated measures to fight speculators
in the currency market. More proposals were made by the president to
ensure a more
independent Russian economy, such as the establishment of a new and
transparent supervision system between business and government by 2015
in order to prevent obsessive governmental control, as well as a
one-time full amnesty for repatriated offshore capital.

Alexei Makhlai, president of the Social Policy Research Center, a
non-governmental organization, said Putin's capital amnesty proposal
could succeed and help revive the stagnated economy. "Putin hinted that the authorities would consider repatriation of the
assets not only as an economic move, but also as a political sign of
support to the Russian state, as a manifestation of patriotism," he told
Xinhua. Meanwhile, Maxim Osadchy, head of analysis at Moscow-based Corporate
Finance Bank, disagreed, citing the lack of trust between businessmen
and politicians.

"The other thing is, the investors' behavior depends on real economic
situation much more than on any politician's words," the expert told
Xinhua. Russia's economy has been hit hard due to the continuous fall of
world oil prices and Western sanctions, with the country's Economic
Development Ministry estimating a 0.8 percent contract in 2015. The
Russian currency, ruble, has also lost nearly 40 percent of its value
against dollar and euro.

HAILING NATIONAL STRENGTH

The events of the departing year demonstrated Russian state and
people's strength and proved the necessity for the country to remain
strong and sovereign amid Western pressure, Putin noted. "This year we have passed through trials that only a mature and
united nation, a truly sovereign and strong state can cope with," Putin
said at the beginning of the address. He accused the United States of its attempts to influence the relations between Russia and neighboring countries "directly or indirectly."

Russia
has respected and will always respect the inalienable right of
every nation, including Ukraine, to choose its own path of development,
allies as well as political and economic systems, Putin said. Current
focus should be on the peaceful resolution of the Ukraine
crisis, as well as political and economic reform of Ukraine, "instead of
politicking and empty promises," he said.

"(The West) attempts to contain Russia's growing influence. If it
wasn't for sanctions, they'd invent something else. But it's senseless
to talk to Russia from the position of force, even when Russia faces
internal difficulties," Putin said.

While pointing out that western sanctions also hurt those who
initiate them, Putin stressed that Russia will not bow because "the more
we retreat, the more our opponents will behave cynically and
aggressively." Putin ruled out curtailing cooperation with Europe and the United
States, saying that Moscow will restore and broaden traditional ties
"with the south of the American continent and will continue cooperation
with Africa and Middle Eastern countries."

The
president stressed Russia is not to engage in a costly arms race
and will not seek self-isolation despite current challenges. "No one can
reach military superiority over Russia ... We've got
enough strength, will and courage to defend our freedom," Putin stated.
Putin warned that the U.S. global missile defense system threatens
the security of not only Russia but the entire world, bringing possible
disruptions of the strategic balance of forces.

"After the U.S. unilaterally withdrew from the Anti-Ballistic Missile
Treaty in 2002, it continues intense work to set up a U.S. global
missile defense system, including in Europe," Putin said. "I think it is detrimental to the United States itself, as it creates
a dangerous illusion of invincibility and increases the desire for
unilateral and, as we often see, injudicious decisions."

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